Statement by Crown Prince Mohammed bin Salman of Saudi Arabia on the Announcement of the Budget for Fiscal Year 2019
HRH Crown Prince: The State Budget Statement Reflects the Kingdom’s Keenness to Adopt the Highest Standards of Transparency and Financial Disclosure
RIYADH, December 18, 2018 – His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, the Crown Prince, Deputy Prime Minister, Minister of Defense and Chairman of the Council of Economic Affairs and Development, affirmed that economic and structural reforms in the national economy are progressing steadily towards achieving the objectives of the Kingdom’s Vision 2030, which aims to diversify the economy, realize economic stability and financial sustainability, as well as stimulate the private sector and work to improve the standard of living for all citizens.
In a press statement following the announcement of the state public budget for fiscal year 1440/1441H (2019), His Royal Highness said: “This year’s budget continues to improve the efficiency of public fiscal management, and promote economic stability and financial sustainability.” His Royal Highness pointed out that financial stability is a fundamental pillar of economic progress and growth, adding that the economic reforms and initiatives implemented over the past two years have directly contributed to reducing budget deficit rates in 2016, 2017 and 2018 by 12.8%, 9.3% and 4.6%, respectively, while increasing the volume of spending annually.
His Royal Highness stressed the effectiveness of these reforms and initiatives through their clear impact on raising the indicators of the national economy’s growth during the past period. He pointed out that according to the pubic budget statement, real GDP growth for 2019 is expected to reach 2.6%, compared with 0.9% and 2.3 % in 2017 and 2018, respectively. He said that the positive financial results reflected in the budget indicators are part of pursuing financial sustainability in the medium term, according to the Kingdom’s Vision 2030.
His Royal Highness said the government is going ahead in diversifying revenue sources and enhancing financial sustainability through increasing non-oil revenue, which rose from 127 billion Saudi riyals in 2014 to 287 billion riyals in 2018, and is expected, according to the public budget statement, to reach 313 billion riyals in 2019.
His Royal Highness said that the government has continued to adopt a policy of balancing debt issuance, withdrawals from government deposits and the state’s general reserves, in order to finance the budget deficit during the current fiscal year of 2018. The government will adopt the same approach in fiscal year 2019.
The Kingdom’s government will continue working to implement the economic and structural reforms in various fields during 2019, HRH clarified. He stressed that the government’s desire to increase efficiency of spending to ensure the best economic and social return, including the development of governmental support mechanisms to ensure that support reaches those most deserving of benefits. He pointed out that social spending represents approximately 42% of the total expenditure in the budget. The Crown Prince reiterated the interest in the development and modernization of infrastructure and government services, praising the efforts that have improved the efficiency of fiscal management.
HRH said that the government has made additional investments in initiatives and programs to achieve the Kingdom’s Vision 2030, which aims to support economic growth. The goal is to strengthen the infrastructure, enable the economy to create more jobs for citizens, and create an attractive investment environment that contributes to directing the national economy towards broad horizons of growth and prosperity, HRH stated.
He also stressed the importance of the private sector’s role as a strategic partner to support economic growth in the country. HRH announced that the state has allocated 200 billion (riyals) in the medium term to implement multiple initiatives aimed at stimulating the private sector directly. The implementation of these initiatives began in 2018, he said.
His Royal Highness pointed out that the public budget statement reflects the Kingdom’s keenness to adopt the highest standards of transparency and financial disclosure to enhance confidence in the Kingdom and its economic and financial clout.
He concluded by reiterating that the government is committed to providing more services, improving the quality of life, and investing in infrastructure for the current and future generations, in order to achieve citizens’ aspirations and needs.