RIYADH: Saudi Arabia’s public debt increased by just over 2 percent to SR958 billion ($256 billion) at the end of the first quarter of 2022, according to a quarterly report from the Ministry of Finance. 

The increase in public debt — which stood at SR938 billion in the fourth quarter of 2021 — was driven by higher domestic issuances combined with lower principal repayments. 

The “issuances and borrowings” by the Kingdom during the first quarter of 2022 totaled SR52.6 billion, while the repayment of principal over the same period was SR32 billion.

The public debt level is SR20 billion higher than that projected by Saudi-based Jadwa Investments, which expected it to stay at SR938 billion in 2022 and 2023, according to a research report issued earlier this week.

Jadwa revised upward the firm's projection for the Kingdom’s nominal gross domestic product growth in 2022 to 22.8 percent year-on-year from the previous February estimate of 10.9 percent.  As a result the firm is now projecting a lower 2022 public debt-to-GDP ratio of 24.4 percent compared to 26.4 percent previously.  

In February, Jadwa cited a recent statement by the National Debt Management Center that “the funding requirement in 2022 would mainly focus on refinancing SR43 billion of debt, although it would remain opportunistic by exploring additional debt raising activities, depending on market conditions.”

Though public debt increased in the first quarter of 2022, the rise in public debt-to-gross domestic product ratio at year-end is likely to be capped by the strong growth in nominal GDP projected for the current year.

Saudi Arabia’s real GDP grew 9.6 percent year-on-year in the first quarter of 2022, the highest growth rate in 10 years, according to the General Authority for Statistics. The increase was driven by a significant increase in oil activities.

The Kingdom’s public debt-to-GDP ratio stood at 30 percent as of Dec. 31, 2021, data compiled by Arab News shows.