RIYADH: Saudi Arabia, the Arab world's largest economy, recorded its first quarterly budget surplus since the 2014 oil price slump, kingdom’s finance minister said.
The first quarter surplus for Opec’s top oil exporter reached 27.8 billion Saudi riyals (Dh27.2bn), as income from hydrocarbons sales rose and revenue from non-oil industries expanded, Mohammed Al-Jadaan told delegates at a financial conference in Riyadh, report agencies. “This year's budget is a solid proof of our commitment to [the kingdom’s] Vision2030,” Mr Al-Jadaan said on Wednesday. “The government is moving ahead with its comprehensive reform programme aimed at managing public finance, boosting transparency and supporting the private sector development”.The kingdom, which still relies on sale of hydrocarbons for a major chunk of its revenues, is undergoing a massive economic overhaul since the three-year oil price-slump that saw crude fall from a mid-2014 peak of $115 per barrel to below $30 per barrel in the first quarter of 2016. The price of oil rallied in the second half of 2018 breaching $80 per barrel, which strengthened the kingdom’s financial muscle. Brent is currently hovering around $75 per barrel.
However, despite the boost in hydrocarbon revenues, Riyadh is pressing forward with its economic diversification plans to lessen dependency on oil.
The government has increased spending to kick-start economic growth with an expansionary budget for this year and imposed a value-added tax last year to increase its non-oil revenues.
Riyadh is moving forward with its reform agenda under the kingdom's Vision 2030 programme which includes managing public finances, selling stakes in some of the take-owned entities such as Saudi Aramco and expanding the country’s non-oil industrial base.
Total spending increased 8 per cent in the first quarter, while revenue surged 48 per cent, Mr Al-Jadaan told the conference.