RIYADH — Saudi Arabia's Minister of Finance Mohammed Al-Jadaan said that some of the costs borne by the private sector will be reviewed. Speaking to reporters after the approval of the general budget by the Council of Ministers on Sunday evening, he emphasized that the Kingdom's priority is to promote growth more than any increase on non-oil revenues. Al-Jadaan said 2022 budget reflects the Kingdom's keenness to boost the economic growth in post COVID 19 period. "The budget also mirrors the government's keenness to use the financial resources to spend on health, education, and development of basic services, in addition to continuing support and social subsidies," he said. The minister stressed that the realistic and responsible policies and measures taken by the government to deal with COVID-19 limited the humanitarian, financial and economic repercussions through providing strong support to the health and private sectors while maintaining financial sustainability for the medium and long terms. "These policies reflected positively on the gradual recovery of the local economy, which witnessed accelerated growth in some economic activities. The surplus of 2022 budget will be directed to strengthening the government reserves, supporting development funds and the Public Investment Fund (PIF), as well as considering the possibility of accelerating the implementation of some strategic programs and projects that have economic and social dimensions," he said while noting that the surplus may also be used to repay part of the public debt according to the market conditions. Al-Jadaan indicated that the budget is a continuation of the reforms that support the development of the public financial management and commitment to maintaining the previously-announced spending ceilings. This aims to ensure financial sustainability and a strong financial position in the medium term, which enables the state to confront any emergency variables and absorb unexpected economic shocks. Regarding the public debt, Al-Jadaan said its indicators are expected to improve in 2022 to decrease to nearly 25.9 percent of gross domestic product (GDP) compared to 29.2 percent in 2021. This comes as a result of forecasts of achieving budget surplus as well as GDP growth. However, the government would borrow to repay the principal debt when it matures and take advantage of the favorable opportunities in the market. It aims to support reserves or finance capital projects that can be accelerated through annual issuances. The debt-to-GDP ratio is expected to remain at appropriate levels to hit 25.4 percent in 2024, the minister said. He noted that the government is working to develop a risk management framework that aims to follow up and monitor the most prominent developments in the local and global economies, to identify the relevant risks, and then assess their implications. Preliminary estimates for 2021 showed a real GDP growth of 2.9 percent, driven by a rise in non-oil GDP, which is expected to grow by 4.8 percent. The minister also noted that the forecasts for 2022 also indicates a real GDP growth of 7.4 percent, driven by the rise in oil GDP associated with the OPEC + agreement, in addition to the expected improvement in non-oil GDP with the continued recovery of the economy and the implementation of projects and programs that support growth and economic diversification.
