RIYADH – Several ministers, economic analysts and officials were of the view that the budget would further spur the Kingdom's sustained and balanced development in all sectors and improve the living conditions of citizens. By all means, the 2013 budget expands expenditure above most expectations and above the traditional annual growth level. Revenues are conservatively estimated to remain above projected spending, giving a small surplus, an analyst in Jeddah said on the Kingdom's record budget for the coming year. “We all know that if oil prices stay above $85 per barrel, then a substantial surplus will be recorded in 2013, far more than the projected figure. The 2013 budget sends a strong message that the country will continue to spend, as revenues remain elevated,” he added. These are important pro-cyclical policies but high spending is neither sustainable forever, nor advisable from a macro-fiscal and macro-prudential point term equilibrium price, remains well anchored between $80-$90 per barrel, of view. The five-year forward oil price, which is a good proxy for a medium-suggesting little structural upside to the current spot price.
"More specifically, the 2012 surplus of SR 386 billion was allocated toward the development of the public transportation system (SR 200 billion) which the main urban cities desperately need and the remainder was allocated as part of foreign reserve assets," the analyst said while commenting on the budget The ministers and senior officials thanked King Abdullah and Crown Prince Salman for approving the biggest-ever budget in the Kingdom's history, according to the Saudi Press Agency. Higher Education Minister Dr. Khaled Al-Anqari: It is great to have more than one-fifth of the budget spending allocated to the education sector. The appropriations for universities alone have exceeded SR50 billion, in addition to allocations for the construction of three university hospitals and completion of several university cities. Separate budgetary allocations for the electronic university shows the significance given to this sector. Health Minister Dr. Abdullah Al-Rabeeah: The emphasis given to health sector shows the King's keenness in ensuring the best living conditions for the citizens and safeguarding the Kingdom's real wealth and potential. There are allocations for construction of 19 new hospitals, completion and furnishing of 103 hospital projects and five medical city projects in addition to opening of 29 new hospitals. Huge spending on health sector would enable the ministry to make available of the highly advanced medical facilities and improved medical services. Transport Minister Dr. Jabarah Al-Suraisiry: Huge hike in budgetary appropriations in the transport sector would reflect the government's keenness to build an integrated and high-standard network of high-tech roads, rail roads, and seaports so as to make it a vital support to the sustained development and a further boost to the economic growth. There have been allocations for implementing road projects with a total length of 3700 km, and carrying out studies and design works of other 1523 km roads. Allocations have also been made to upgrade and modernize seaports, construction of new wharves, supply of train bogies and wagons for the Saudi Railway Organization as well as to increase its efficiency. Labor Minister Adel Fakieh: A huge increase in government spending would, no doubt, create more job opportunities for young Saudi men and women and thus contribute substantially in reining in unemployment. The high figures of appropriations for vital sectors reflect the leaders' keenness in strengthening the Kingdom's sustained growth, increasing economic competitiveness and improving the living conditions of Saudi citizens. Housing Minister Dr. Showaish Al-Dowaihi: The budget reflects the ambitious vision of Saudi leaders to realize the overall development and progress of Saudi Arabia, especially in the housing sector. The Kingdom is witnessing qualitative and quantitative leaps in various sectors, thanks to the government's focus on a knowledge-based economy. Shoura Council President Sheikh Abdullah bin Mohammed bin Ibrahim Al-Sheikh: The budget shows several positive economic indexes such as giving priority in spending on education, training and health sectors, improving living conditions of citizens, maintaining balanced and sustained economic growth, upgrading utility services and above all focus on developing and investing on human resources. Dr. Saad Mariq, head of Shoura's Financial Committee, said: “It is evident that the focus is on both education and health, the two sectors that have direct impact on people and their future. “Within five years, around 102 hospitals and five medical cities were built in the health sector, while in the education sector around SR 200 billion was spent, including SR 26 billion on King Abdullah Scholarship Program.” Dr. Zain Al Abdeen Barri, member of Shoura's Economic Committee, said that the budget is a generous and unprecedented one. “Though it appears slightly higher than the last year's budget, it is in reality almost the same if we take into account the real expenditure of last year's budget,” he said hoping that new budget will not cause any inflationary pressures. Dr. Nasser Al Towaim, chairman of Saudi Consumer Protection Association: The budget is optimistic and historic. “Regardless of high figures, I hope this budget is reflected in reality by the projects and services that can tangibly bring prosperity to people of the Kingdom.”
— Saeed Al-Kotani contributed to the report from Riyadh
