Saudi Arabia's budget for 2024 is the Kingdom’s fourth trillion-riyal fiscal plan, and it comes despite a 20% year-on-year drop in oil prices and a 17% fall in production.
Revenue for the general budget for 2024 is at 1.172tn riyals, or $312.5bn. Expenditure is set at 1.251tn riyals, or $333.6bn, creating a deficit of 79 billion riyals, or $21bn.
His Excellency the Saudi Minister of Finance, Mohammed Al-Jadaan, points out that a budget deficit is not a cause for concern as long as it is allocated to productive expenditure.
Saudi deficits from 2023 to 2027 are due to increased spending on strategies and projects that will spur economic growth. One of the key features of the Saudi budget is economic diversification, the move away from dependency on oil revenues.
The 2024 budget is a significant part of the Saudi Vision 2030 reforms. It clearly demonstrates that the Kingdom of Saudi Arabia has already moved beyond total dependence on oil revenues. This progress is evident in the budget, with expenditures increasing every year until 2026.
It is accompanied by ongoing efforts to enhance the efficiency and effectiveness of spending, financial control, public financial sustainability, and the implementation of economic and financial reforms to achieve the goals of Vision 2030.
Oil price fluctuations, which previously had a significant impact on the budget, have become less influential due to the rise in non-oil income.
Therefore, a reduction in Saudi oil production will not substantially impact the budget, which also follows a conservative pricing scenario, meaning the Kingdom is not just dependent on moves on the international oil markets for its national financial planning.
Even if oil prices were to fall to lower levels than those seen this year, the Kingdom will remain capable of managing its budget. Non-oil revenues reached about 441bn riyals, or $117.6bn, in 2023, compared to about 411bn riyals, or $109.6bn, in 2022, an increase of 30bn riyals and a growth rate of 7.3%. It marks the seventh consecutive annual increase since the launch of Saudi Vision 2030.