WASHINGTON DC: Saudi Arabia’s private sector will play a prominent role in 2021 and beyond, Albara’a Alwazir, economist at the US-Saudi Business Council (USSBC) told Arab News.

“The Kingdom has created strong fiscal buffers to withstand global shocks, as was witnessed in 2020 with the coronavirus pandemic. While it is pursuing a balanced financing policy, its renewed commitment to rely on domestic debt issuances in lieu of substantial drawdowns of its reserves will promote the sophistication of its debt market, while still remaining well below its debt ceiling of 50 percent of GDP,” he said following the Kingdom’s budget announcement on Tuesday.

“Furthermore, the discipline at which the government plans to execute its debt strategy will see its debt to GDP gradually decrease to only 4.9 percent of GDP in 2021 and further reduced to 0.4 percent of GDP by 2023,” he added.

"A noteworthy development is the reduction of capital expenditures from SR137 billion ($36.53 billion) in 2020 to SR101 billion in 2021, a 26 percent decrease. While the decline may seem considerable at first glance, the government noted that heavy investments in prior years to develop its infrastructure capabilities warranted a slowdown in its own spending while allowing the private sector to continue its growing involvement in the development of the country.

“The pandemic caused delays to a number of VRP (Vision Realization Programs) spending plans in 2020, yet the government is keen on delivering on these initiatives to deliver on its Vision 2030 mandate. The private sector will play a prominent role in developing the economy coupled with significant support from the Public Investment Fund, which has already committed SR300 billion to the domestic economy for 2021 and 2022,” he said.