The Kingdom of Saudi Arabia has just unveiled their 2016 fiscal budget on Monday. The Annual Fiscal Budget which had been unveiled also predicted or rather showed a deficit of nearly 326 billion Riyals ( $ 87 billion in the new year which is arriving shortly. The story was initially reported by the Al Arabiya News Channel of Saudi Arabia. King Salman, the Custodian of the Two Holy Mosques has stated that the economy of Saudi Arabia has the potential which is necessary in order to face such challenges. King Salman stated this in a speech whilst he added that the annual fiscal budget of the 2016 year will be launching a new phase in which the Kingdom of Saudi Arabia will be diversifying their revenues.
The Saudi government has run a deficit of 367 billion Saudi Riyals or nearly $ 98 billion. This amount also roughly estimates to around 15 percent of the gross domestic product, better known as the GDP of the 2015 fiscal year. The 2016 fiscal budget has planned to cut this down hopefully to 326 billion Saudi Riyals. The following year’s fiscal budget has projected spending around 840 billion Saudi Riyals, down from the 975 billion Saudi Riyals which have been actually spent by the government in the duration of the 2015 fiscal year.
The ministry has also stated that it would be additionally be reviewing the government projects in order to make them more efficient and also ensure that they were affordable and necessary. The revenues for the following Fiscal year has been estimated at being 514 billion Saudi Riyals, which is again a decrease from the current fiscal year which has had 608 billion Saudi Riyals worth of revenue to date. This amount however comprises mainly of oil based revenue which accounted for around 73 percent of the total sum.
The new budget has allocated 191 billion Saudi Riyals towards education while 213 billion Saudi Riyals have been allocated towards the military and defense sector. Subsequently the revenues derived from non oil sales have increased by 29 percent, now standing at 163 billion Saudi Riyals. Since King Salman ascended to the throne of the Kingdom of Saudi Arabia, this has been the first ever budget announced under his rule, and thus this new budget reflects upon the reforms which King Salman has been pointing towards since his ascension and also which he had announced last week.
King Salman stated to the Shoura Council, that the vision for these economic reforms is to increase the efficiency of public spending and utilizing the economic resources in order to boost the returns from the state investment. Dr. Fahd Bin Jumaa, the vice president of the economy and energy committee within the Shoura Council of Saudi Arabia had previously predicted that the new budget had been drafted upon the speculated price of oil at $ 45 per barrel. He subsequently also ruled out any cuts in public spending or subsidies or any increase in taxes or fees, in his prediction.
Source: Al Arabiya
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