Economic updates
Our in-depth, independent reports cover the macroeconomic environment, the Saudi government’s annual budget, and Saudi Arabia’s monetary and financial developments, labor market, and inflation.
Saudi Arabia’s coming oil and fiscal challenge
Saudi Arabia is currently enjoying oil revenues in excess of its fiscal needs, but government spending and domestic consumption of crude oil are rising far faster than overall oil output. We have examined each of these trends in detail and projected their likely path to 2030. For the next decade, high government savings mean the fiscal position remains healthy. For the 2020s, the environment will be very different.
Feature: Falling dollar lifts oil price comfort zone.
Oil prices have jumped to two-year highs primarily because of the weakness of the US dollar. Seemingly in response to this dollar depreciation, the Kingdom appears to have lifted the ceiling on its preferred level for oil prices.
Q2 2021 Budget Statement: (Fiscal deficit remains contained)
Budget reportGovernment revenue totaled SR248 billion in Q2 2021, up a sizable 85 percent, or SR114 billion, year-on-year. Looking at the breakdown, both oil revenue (up 38 percent year-on-year) and non-oil revenue rose sharply (up 203 percent year-on-year).
Q1 2021 Budget Statement: (VAT makes a difference)
Budget reportGovernment revenue totaled SR205 billion in Q1 2021, up 7 percent, or SR13 billion, year-on-year. Looking at the breakdown, oil revenue declined 9 percent year-on-year whilst non-oil revenue rose 39 percent compared to the same period last year.
