RIYADH: Saudi Arabia is expected to see a narrower fiscal budget deficit this year, according to Riyadh-based Jadwa Investment.
“The Ministry of Finance (MoF) recently outlined that the fiscal deficit is expected to hit -SR85 billion (or -2.7 percent of GDP) in full year 2021, although we expect it to be even lower, at around -SR67 billion (or -2.1 percent of GDP),” Jadwa said.
Saudi Arabia registered a fiscal surplus amounting to SR6.7 billion ($1.78 billion) in the third quarter of 2021, with the year-to-third quarter deficit at -SR5.4 billion, MoF reprted last week.
“With Brent oil prices currently trading above $80 per barrel, there is a strong possibility that full year 2021 government oil revenue could surpass our current estimate of SR528 billion,” the investment bank said.
The Kingdom’s income from VAT contributed 70 percent of non-oil revenues during the third quarter of 2021. “Value added tax (VAT) revenue remains a key component of non-oil revenue,” Jadwa said.