Saudi Arabia cut its fiscal deficit by 44% in Q1, says Prince Mohammed

Saudi Deputy Crown Prince Mohammed bin Salman said the Kingdom was successful in cutting its fiscal deficit by 44 percent in the first quarter of the year.

The deficit was mainly offset by oil revenues and OPEC’s production cut agreement with non-member countries, along with strong investment returns generated by the Saudi Public Investment Fund (PIF).

Non-oil revenue, which almost doubled to SAR 200 billion from SAR 111 billion, was another factor.

Prince Mohammed added that the Saudi government targets public debt at 30 percent of gross domestic product (GDP), in line with its Fiscal Balance Program 2020. The Kingdom is also targeting to cut unemployment rates to 7 percent by 2030 and create new jobs for Saudis. 

Commenting on energy and water tariffs, the Prince confirmed that new price hikes will only impact wealthy citizens and expats.

Such reforms will undoubtedly have side effects, especially amid lower oil prices and public spending cuts, he added.

The prince outlined Vision 2030 as a three-tiered plan with the first phase running through 2020, the second until 2025 and the final phase through 2030.

He described them as executive programs carrying clear-cut means and goals to achieve the vision. But he also said the government is feeling pressure to launch the initiatives. “We don’t want to be delayed,” he said.

The interview follows the announcement earlier this week of 10 remaining programs, and the extensions of original plans set to be implemented for the 2020 program.

Vision 2030 was launched in 2016 after the Saudi government announced in December 2015 that it had a $98 billion budget deficit due largely to plummeting oil prices.

The program is an aggressive effort to reduce the deficit by weaning the nation from its dependence on oil revenue and focus on non-oil revenue such as promoting tourism, developing a favorable environment for entertainment venues, and creating more jobs for Saudi women.