Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan has announced that the kingdom has entered a phase of financial stability and has taken active steps to set a ceiling on energy prices.
During his participation in the first session of the 2023 Budget Forum, entitled “Financial Sustainability and Engines of Economic Growth”, Mohammed bin Abdullah Al-Jadaan said: “The road to achieving a budget surplus started with the budget balance program, and there were big challenges, so how the deficit reached 5 years ago. Approximately 15% of the financial domestic product of the budget, and we had to withdraw more than a trillion rials from reserves over several years to cope with the deficit, “noting that the withdrawal from reserves is a serious and overwhelming task, since it is impossible to continue withdrawing funds from reserves, because they run out.”
He added: “The goal of the fiscal balance program is to achieve a ‘zero deficit’ and we have achieved that and are running a budget surplus now.”
Al-Jadaan responded to those who say the surplus came about after the rise in oil prices, saying: “Praise God for oil. It is no shame that you have resources that you use effectively to achieve your strategic goals. Some of them are achievements.”
He stressed that structural reforms have taken place over the past five years and that non-oil revenues only covered 10% of expenditures, and covered 40% of expenditures at the end of 2021, explaining that dependence on fluctuating source revenues is dangerous, which led to previous deficits. .
He stated that there has been a transition from the financial balance stage program to the financial sustainability program, which is planned for 3 years and can be extended up to 10 years, as it includes many programs and plans, including the Saudi Arabia Vision 2030, indicating that spending has become dependent on the strategy, and not on the request of the authorities from the ministry without the development of an agreed strategy.
The finance minister said that the Kingdom had taken active steps to impose a ceiling on energy prices and that the main cause of inflation was energy prices, as Saudi Aramco was subsidized by tens of billions of dollars in compensation in exchange for selling at a lower price. than the world price to avoid exporting inflation to the Saudi economy, pointing out that 20 billion was pumped out. were confident that they were importing enough to ensure an abundance of supplies.