Saudi budget adds up to efficient spending, private sector empowerment 
Saudi Arabia’s 2020 budget, announced by King Salman this week, continued to focus on implementing the realization programs of the country’s Vision 2030 reform plan with particular attention on wise spending and private-sector empowerment.
After 2019, next year’s budget is considered to be the second largest in the Kingdom’s history with total expenditure amounting to SR1.02 trillion ($272 billion) which will be spent on supporting public services such health care, education and infrastructure projects.
Such a large budget is also expected to fund social protection programs, private sector development, and the re-evaluation of priorities consistent with better performance of the non-oil economy.
What is very clear from the figures, is that the Saudi government is aiming to achieve steady and sustainable growth by encouraging the non-oil sector and making the private sector more effective in its contribution to a non-oil GDP.
This is evident by the growth of real GDP in the first half of this year by 1.1 percent, driven by the annual rise in the non-oil GDP of about 2.5 percent.
The government is aiming to improve the private sector contribution to the non-oil GDP, as can be seen by its rise of 2.9 percent during the first half of this year, while oil GDP has declined by about -1 percent.
The new budget is being prepared in the context of a very challenging global economic outlook.
The International Monetary Fund (IMF) has predicted that growth will remain subdued, with a forecast of 3.2 percent in 2019 and slightly up to 3.5 percent in 2020.
Moreover, the budget has been prepared in an oil-market condition best described as unstable and volatile, in addition to the trade dispute between the US and China, and the UK poised to leave the EU (Brexit).
However, despite these challenges, the budget forecasted total revenues of SR833 billion and a budget deficit of SR187 billion (6.4 percent of the GDP), which is reasonable and quite acceptable in accordance to world standards.
To conclude, I believe that the 2020 budget numbers are very sound and it will serve the objectives of the Saudi government with regard to enhancing the contribution of the non-oil sector to the GDP as well as enhancing the participation of the private sector in the overall economic development of the Kingdom.
A number of world-class and top-notch institutions such as the World Bank, IMD and IMF have complimented the Kingdom’s economic and financial reforms, especially those focused on improving the business climate and doing business in the Kingdom.
• Talat Zaki Hafiz is an economist and financial analyst.
