Saudi Arabia's Revised Budget Estimates Based on Brent Price of USD81 Per Barrel

(MENAFN) According to a report by Al Rajhi Capital, Saudi Arabia's budgeted revenue for the first quarter of 2023 was likely revised to be based on the Brent price of USD81 per barrel. This is a revision from the previous budget estimates, which were based on oil prices at approximately USD77 a barrel. The reassessment followed the decision of the Organization of the Petroleum Exporting Countries and its allies to cut production. Mazen Al-Sudairi, head of research at Al Rajhi Capital, stated that the government's 2023 budgeted revenues are likely based on an assumption of Brent at $81 per barrel.

Saudi Arabia's total revenue is predicted to have reached SR1.13 trillion (USD301 billion) in the first quarter, compared to SR1.12 trillion in the same period of 2022. However, increased spending on the military, education, and health sectors caused the budget to slip to a deficit of SR2.9 billion in the first quarter of 2023. This year's spending plan is in line with earlier projections but with a fiscal surplus of SR16 billion as opposed to SR9 billion estimated earlier. Al-Sudairi noted that the additional expenditure "is reflective of the government's measures to support economic growth."

Non-oil revenues are likely to increase slightly above last year, backed by the non-oil gross domestic product growth. Al-Sudairi added that for 2023, oil revenues could reach SR709 billion and non-oil revenue at SR421 billion. As for expenditure, the government anticipates spending roughly SR1.1 trillion this year, a 4.32 percent annual decrease from 2022 but consistent with earlier projections. Since the government expects revenues to be higher than previously anticipated, a larger surplus of SR16 billion has been built in, according to the report.

The report also highlighted that in 2022, Saudi Arabia recorded a 31 percent rise in government revenues, reaching SR1.26 trillion, as announced by the Ministry of Finance last month. The revised budget estimates for the first quarter of 2023 reflect Saudi Arabia's ongoing efforts to manage its finances amid fluctuating oil prices and changing global economic conditions. The country's focus on supporting economic growth through increased expenditure on key sectors is expected to contribute to its long-term economic stability and growth.

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