By Innovation-sa on December 24, 2017 in News

Custodian of the Two Holy Mosques King Salman unveiled Saudi Arabia’s biggest ever budget in history, demonstrating the Kingdom’s optimism towards economic diversification and private sector expansion.

The budget is projected at $260.8 billion in 2018, which is slightly higher than Saudi Arabia’s 2017 budget of $250 billion.

King Salman announced that dozens of programmes have been launched within the guidelines of Vision 2030 to diversify the economic base, empower the private sector and improve the living standard of citizens.

Through this expansionary budget and additional spending by development funds, the Kingdom plans the highest level of government spending next year, when the expenditure will hit more than SR 1.1 trillion.

The National Development Fund will allocate fund for housing, industrial and mining projects as well as for stimulating private sector. The Public Investment fund (PIF) will also fund new and existing projects in 2018.

Saudi Arabia projects to bring around SR 783 billion in revenue in 2018, in comparison to SR 692 billion in 2017.

Despite huge spending, Kingdom aims at narrowing the budget deficit next year to less than 8 percent of GDP, approximately SR 195 billion. The Kingdom expects to balance the books by 2023.

The expansionary budget for 2018 focuses on redesigning the Saudi economy by reducing the dependence on oil, reducing subsidies, creating jobs for male and female citizens and recommitting to invest in the future productive capacity of the economy. The ease in fiscal policy would help the Kingdom’s economy grow faster.

The government intends to cut energy subsidies next year because of which fuel prices are set to rise by 80 percent in January 2018. The move is widely expected to free up funds for other parts of the economy such as infrastructure.

Saudi economy was heading to a mild recession of minus 0.5 percent in mid-2017. With the rise in oil prices, the economy is expected to leap to 2.7 percent in 2018.