Public spending to cross SAR 1 trln in 2018, says Prince Mohammed

Saudi Arabia’s total expenditure will likely exceed SAR 1.1 trillion in 2018, Crown Prince Mohammed bin Salman said on Tuesday.

Public sector expenditure in the Kingdom, which has been coordinated to achieve the development goals for the next fiscal year, will come from three main sources.

The first source is expenditure in the budget, which is estimated at SAR 978 billion.

In addition, a total of SAR 50 billion will be allocated by the development funds operating under the National Development Fund (NDF) to finance housing, industrial, and mining projects, as well as the stimulus package for the private sector.

The Public Investment Fund (PIF) will serve as the third source of capital and investment spending, projected to spend up to SAR 83 billion in the next fiscal year, Prince Mohammed said.

PIF and NDF will together contribute SAR 133 billion to the total capital expenditure, which is estimated at nearly SAR 338 billion in 2018. The budget will account for the remaining SAR 205 billion.

“The announcement of the largest government spending program in the Kingdom’s history is a strong indication of the success of the efforts to improve public financial management, despite the significant decline in oil prices from previous years,” Prince Mohammed said.

The 2018 budget also includes allocations for providing more housing units, and connecting 700,000 homes with the fiber optic network.

The Kingdom’s economic reform programs under the Saudi Vision 2030 have started to pay off, Prince Mohammed said, adding that almost half of this year’s budget will be financed from non-oil revenue and debt instrument proceeds.

The government will make more efforts to enhance economic growth and improving the standard of living for Saudi citizens, the prince added.