Business community welcomes 2021 spending plans

RIYADH: Headed by King Salman, Saudi Arabia’s Council of Ministers on Tuesday approved the Kingdom’s general budget for 2021. It includes spending of SR990 billion ($264 billion) and, with revenues expected to be SR849 billion, an estimated deficit of SR141 billion, which represents 4.9 percent of gross domestic product (GDP).

“Our directives have been issued to give in this budget priority to protecting the health and safety of citizens and residents, to continue efforts to mitigate the effects of this pandemic on our economy, and to continue the work to stimulate economic growth, develop services, support the private sector and preserve the jobs of citizens, and implement housing programs and projects,” said King Salman.

According to a statement issued by the Saudi Press Agency on behalf of the Ministry of Finance, preliminary estimates for the year 2021 indicate real GDP growth of about 3.2 percent, driven by the assumption that economic activities will continue to recover during the year.

Public debt is expected to reach about SR854 billion, representing 34.3 percent of GDP. The statement also included the balance of government reserves, with education awarded SR186 billion, and health and social development SR175 billion.

The budget was welcomed by experts and analysts in the Kingdom. Saleh Al-Nazaha, a member of the Shoura Council’s Economics Committee and the president of Badael, a medical supplies manufacturer, said it “proves that the Saudi government continues to focus on the most important components of the country, which are the citizens, and ensuring their health and providing jobs to help the economy recover following one of the toughest years for the world.”

He added: “It is good news that the government continues to support the private sector, which had a lot of support in 2020.”

Abdullah Baeshen, a financial adviser and chairman of Team One Financial Consultants, said that the 2021 budget was unexpected, not because of the effects the coronavirus pandemic had on it but because of the different principles it employs to chart recovery from the health crisis, while still maintaining a focus on achieving the aims of Vision 2030.

“Budgets are like a challenge to face crises and reconsider how some sectors work and perform,” he said. “The budget used (some resources) to cover the deficit and discontinued withdrawing from the reserve.”