RIYADH — The Saudi Ministry of Finance announced that the public finances in 2023 saw a 7.3% increase in total revenue compared to the projected revenue in the annual state budget. The increase was driven by rises in both oil and non-oil revenues. In its report on the actual budget performance for the fiscal year 2023, the ministry attributed the rise in oil revenues to the collection of performance-related dividends. Non-oil revenues increased by 15.5% compared to the approved budget, which was linked to economic activity supported by ongoing government efforts to implement non-oil revenue growth initiatives, as well as continuous reforms in tax administration and collection procedures. On the other hand, total expenditures rose by 16.1% above the approved budget, due to increased spending on social support and subsidies following the royal decree raising the basic minimum pension for social security beneficiaries. There was also increased spending on several promising regional and sectoral strategies aimed at diversifying the economic base, with capital expenditures rising by about 19% compared to the approved budget, reflecting ongoing efforts to achieve comprehensive development goals. The Ministry of Finance reported that the public finances recorded a deficit of approximately SR81 billion last year (from an estimated surplus of SR16 billion), equivalent to 2% of the GDP. Public debt stood at around SR1.050 billion, or 26.2% of GDP, compared to about SR95 billion in the approved budget. Government reserves at the end of 2023 amounted to about SR390 billion. The report also noted that actual data for 2023 showed a 0.8% decrease in real GDP, compared to budget estimates of 3.1%, due to a 9% decline in real GDP from oil activities resulting from the continued voluntary reduction of crude oil production by the Kingdom to support the stability and balance of energy markets. Meanwhile, real GDP from non-oil activities showed positive performance, growing by 4.4%, reflecting the Kingdom's efforts to enhance the role of the private sector in driving economic growth, along with efforts to legislate projects and strategies. The report mentioned that inflation last year remained at acceptable levels and below global rates, with the consumer price index rising by 2.3%, higher than the 2.1% estimated in the 2023 budget, influenced by rising prices of essential goods. Additionally, the overall unemployment rate fell to 4.4% by the end of 2023, compared to an estimated 4.8% at the end of 2022. The unemployment rate among Saudis reached a historic low of 7.7%, compared to 8% at the end of 2022, driven by the ongoing recovery of the local economy and intensified efforts by the Ministry of Human Resources and Social Development to provide job opportunities for citizens.
