JEDDAH: Saudi Arabia’s 2017 budget and spending boost announced Thursday suggests its finances are on the road to recovery, economists said, although one forecast that austerity measures would return.
The oil price crash plunged the Kingdom’s budget into the red, recording a severe deficit of SR366 billion in 2015.
But Thursday’s budget statement suggested that situation is easing and that the deficit is “now manageable.”
Despite plans to increase spending next year, the deficit is forecast to be SR198 billion in 2017, down one third from this year’s figure.
John Sfakianakis, the director of economic research at the Gulf Research Center, based in Riyadh, said that the Kingdom’s aim to eliminate the deficit altogether by 2020 looks achievable.
“It’s a very productive growth and pro-market budget that is setting the fiscal consolidation on a very viable path of achieving its 2020 balanced target,” Sfakianakis told Arab News.
“The 2017 expenditure will help build further confidence and will help bring private investment.”
Economist Nasser Saidi said that the Kingdom’s plan to reform energy prices was driving the plan to increase spending next year.
“The increase in projected revenues and expenditure is primarily due to the energy pricing reform program as well as higher international oil prices, although this will be partially offset by the targeted allowances for those citizens who need government support,” said Saidi, a former Lebanese economic minister and former chief economist at the Dubai International Financial Center.
Saidi, who is now president of advisory Nasser Saidi & Associates, said that the greater transparency reflected in the budget was a good sign ahead of the planned initial public offering (IPO) of state oil giant Saudi Aramco.
“Importantly, the budget reflects greater transparency and disclosure by the government which will be a positive signal to investors, both local and international. This should be seen as part of a strategy of greater transparency in the preparation for the Aramco IPO,” he said. “The Saudi authorities should be commended for the greater openness and desire for accountability, as this will encourage business to engage with government.”
Saidi said that the increased expenditure forecast for this year suggests a departure from previous austerity budgets.
“This should also act as a signal to other GCC countries to taper their fiscal consolidation and turn mode to encouraging growth,” he said.
But Jason Tuvey, Middle East economist at Capital Economics, said in a research note that he expects further austerity measures in 2018.
“While austerity seems to have been put on the back-burner next year, it is likely to resume from 2018,” wrote Tuvey.
“The government repeated its desire to balance the budget by 2020, one of the key targets outlined in the Vision 2030 and National Transformation Plan. Achieving this will require fiscal policy to be tightened further, albeit modestly compared with 2015-16. A value-added tax is scheduled to be introduced next year and we suspect that the government will keep a tight rein on spending.”
Tuvey pointed out that the budget was based on a relatively conservative oil price.
“The government isn’t easing the pace of austerity due to hopes for higher oil prices following the recent OPEC deal to cut output. Indeed, the budget has been based on a conservative oil price of just over $50 (per barrel), slightly below current prices of around $55,” he wrote.
“Instead, the easing of austerity reflects the progress made with fiscal consolidation over the past couple of years. Public spending has been cut by a cumulative 25 percent over the past two years and the non-oil budget balance has improved … The public finances haven’t improved on this scale since the early 1990s, following the end of the Gulf War.”
Tuvey’s overall view was that the budget was a positive sign for Saudi Arabia’s finances next year.
“Saudi Arabia’s budget suggests that, following a significant improvement in the public finances over the past couple of years, the fiscal stance will be broadly neutral in 2017. This supports our view that the economy should embark on a gradual recovery next year,” he wrote.
Saudi budget signals economic recovery, say economists
Saudi budget signals economic recovery, say economists
Harvard students explore Jeddah’s history, culture
- This visit is part of a national initiative organized by Saudi students at Harvard University
Jeddah: The Jeddah Historic District Program of the Ministry of Culture recently hosted a delegation of students from Harvard University, the Saudi Press Agency reported.
The students were given a tour of the Jeddah Historic District, known as Al-Balad, highlighting its distinctive architectural, cultural and economic landmarks.
They also participated in activities commemorating World Arabic Language Day, which further enhanced their understanding of the area’s rich heritage.
This visit is part of a national initiative organized by Saudi students at Harvard University to showcase the Kingdom’s cultural and economic development to their peers, the SPA reported.
The Jeddah Historic District Program plays a crucial role in revitalizing the area through community engagement, economic development and sustainable urban planning.
By transforming historic Jeddah into a vibrant environment for living and working, the program aims to establish it as a global heritage and tourist destination.
Saudi project clears 570 Houthi mines in Yemen
Riyadh: Members of Saudi Arabia’s Project Masam removed 570 explosive devices from various regions of Yemen last week.
The total included two anti-personnel mines, 50 anti-tank mines, 508 unexploded ordnances and 10 explosive devices, according to a recent report.
Ousama Al-Gosaibi, the initiative’s managing director, said a total of 473,258 mines had been cleared since its inception in 2018.
The explosives were planted indiscriminately and posed a threat to civilians, including children, women and the elderly.
The demining operations took place in Marib, Aden, Jouf, Shabwa, Taiz, Hodeidah, Lahij, Sanaa, Al-Bayda, Al-Dhale and Saada.
The initiative trains local demining engineers and provides them with modern equipment. It also offers support to Yemenis injured by the devices.
Teams are tasked with clearing villages, roads and schools to facilitate safe movement for civilians and the delivery of humanitarian aid.
About 5 million people have been forced to flee their homes since the start of the conflict in Yemen, many of them displaced by the presence of land mines.
Riyadh forum explores reading’s role in growth
RIYADH: The Reading Forum, organized by the Libraries Commission, recently concluded at King Abdullah Financial District in Riyadh.
The forum featured dialogue sessions and workshops attracting reading and culture enthusiasts, the Saudi Press Agency reported on Sunday.
Discussions covered novels as artistic expressions that reflect culture and history, foster critical thinking, and the role of narration in promoting cross-cultural dialogue.
Participants highlighted reading and research as tools for personal growth, lifelong learning, and effective content creation.
They emphasized the importance of translation in cultural exchange and global copyright, the SPA reported.
Sessions explored instilling a love for reading in youth through collaboration between families, schools and society, as well as leadership in literary trends and the impact of genres on critical thinking.
The event set out to position reading as a foundation of progress, celebrating Saudi, Arab and global literary talent while fostering a culture of knowledge and intellectual growth.
Riyadh festival explores role of theater in shaping intellectual, artistic futures
RIYADH: The Riyadh Theater Festival is hosting a series of cultural discussions and theatrical performances distinguished by intellectual depth and artistic excellence.
Organized by the Theater and Performing Arts Commission, the festival is being held at Princess Nourah bint Abdulrahman University until Dec. 26.
A seminar on contemporary theater in the Arab world explored the intersection of creativity and sustainability, bringing together an elite group of theater thinkers and creators.
One of the festival’s participants, Kamal Al-Alawi from Tunisia, reviewed the evolution of theater, tracing its journey from the Greek era through the Middle Ages and the Renaissance to the time of Emile Zola, which marked a qualitative shift and revolution in impressionism.
Among the intellectuals and theater experts, Lina Abiad from Lebanon discussed ways to improve theatrical production and modernize it using contemporary methodologies.
The commission’s CEO, Sultan Al-Bazie, described the festival as a cornerstone for advancing theatrical movement in the Kingdom and increasing public awareness of the performing arts.
This year’s event features 20 performances, selected by a committee of experts, reflecting the diversity of theatrical arts in the Kingdom and its intellectual and developmental programs.
The festival underscores the commission’s commitment to supporting the performing arts and Saudi talent, aiming for a strong presence on regional and international stages. It will conclude with a presentation of awards to distinguished performers.
Jeddah Book Fair wraps up with 450,000 books sold
- The event hosted workshops, seminars, panel discussions and book signings led by experts in literature, arts and sports
Jeddah: The Jeddah Book Fair concluded on Saturday, attracting thousands of visitors with local and international booksellers.
Held from Dec. 12-21 under the slogan “Jeddah Reads,” the fair featured more than 450 pavilions and showcased works from 1,000 publishing houses across 22 countries.
Mohammed Alwan, CEO of the Literature, Publishing and Translation Commission, said that the fair displayed nearly 400,000 titles, selling more than 450,000 books in various genres.
The event hosted workshops, seminars, panel discussions and book signings led by experts in literature, arts and sports.
A dedicated children’s section featured animation, educational books and advanced learning tools.
One pavilion highlighted the cultural significance of camels, using modern technology to explore their history, types, and related poetry.
Arabic manga publications targeting youth were also a key attraction, alongside interactive displays and models of famous characters, offering a blend of entertainment and education.
