[ad_1]
Saudi Arabia has adjusted its growth forecasts and budget deficit estimates for the fiscal years 2024 to 2026 due to higher spending and lower projected oil revenues. The revised report from the Ministry of Finance indicates a significant drop in the expected real GDP growth for 2024, down to 0.8% from the previous estimate of 4.4%. The projections for 2025 and 2026 have also been revised downwards to 4.6% and 3.5% respectively.

The government’s focus remains on accelerating regulatory and structural reforms, as well as transformative spending to promote sustainable economic growth and enhance social development. The use of sovereign and development funds for capital investment, along with empowering the private and non-profit sectors, is a key part of Saudi Arabia’s strategy to modernize and diversify its economy as outlined in Vision 2030.

Despite the adjustments in growth forecasts, the country is expected to continue running budget deficits over the next few years. The projected budget shortfalls for 2024, 2025, and 2026 are wider than previously estimated, reflecting the government’s commitment to implementing its long-term economic vision.

Saudi Arabia’s fiscal breakeven oil price has been rising, with the latest IMF forecast putting it at $96.20 for 2024. This is a significant increase from the previous year and underscores the challenges posed by lower oil prices amidst global supply dynamics. The country’s ambitious plans for hosting major international events, such as the World Cup 2034 and Expo 2030, as well as investing in megaprojects like Neom, will require substantial spending.

The country’s public debt has increased but remains relatively low compared to international standards. Saudi Arabia’s efforts to boost foreign investment and diversify revenue streams have helped support non-oil economic activity, which grew by 4.4% in the second quarter of the year. Despite economic challenges, the kingdom’s strategic reforms and relatively strong credit rating position it well to navigate future uncertainties.

[ad_2]
SOURCE