Custodian of the Two Holy Mosques Chairs Cabinet's Virtual Session, Approving State General Budget for Fiscal Year 2021

Economics News
Published 16 Dec 2020
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Custodian of the Two Holy Mosques Chairs Cabinet's Virtual Session, Approving State General Budget for Fiscal Year 2021

The Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud chaired today a Cabinet's virtual session, approving the State's General Budget for the fiscal year 2021.
At the outset, verses of the Noble Quran were recited, then the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud addressed the citizens, males and females, announcing the budget.
The following is the full text of the speech:
"In the name of Allah, Most Merciful, Most Gracious. Praise be to Allah, Lord of the worlds, and prayer and peace be upon the Messenger of Allah.
May Allah's Peace, Mercy and Blessings be upon you.
With help and guidance of Allah, we announce the budget of the next Fiscal Year 2021, continuing consolidating the procession of development and prosperity of our dear country, with an endorsed expenditure of the budget that reached SR990 billion, and estimated revenues of SR849 billion and a deficit of SR141 billion, or 4.9 per cent of the Gross Domestic Product (GDP).
The world has experienced a non-precedent pandemic of the Coronavirus that negatively impacted the world economy, and in the context of what have been taken against such pandemic of precautionary and exceptional procedures and measurements, we have been directed to provide free treatment to all those contracted the Coronavirus, citizens, residents and illegal over-stayers, at all public as well as private health facilities. Moreover, a Cabinet decision has been recently issued to disburse SR500 thousand to the family of a dead person because of the Coronavirus pandemic, among workers in the governmental and private health sectors, weather civil or military, Saudi or non-Saudi and that the decision shall took effect on the date of the first reported infection.
The Kingdom is a part of the world, sharing with all, the impacts of great incidents and circumstances. It was not an exception from the effects of the crisis in terms of general finance and economy, as the coronavirus has affected the activity of the local economy in addition to the negative impacts of global economic recession and reduction in demand, particularly on oil which witnessed drastic price fall.
This was a tough year in history. However, the health measures taken, the financial and economic initiatives adopted and the reforms garnered from endorsing the Kingdom's Vision 2030, have altogether resulted in curbing the negative impacts on citizens and residents in the Kingdom and on our economy, thanks to Allah Almighty as well as the cooperation of citizens and residents in our country to whom I avail myself of this opportunity to extend my thanks and appreciation to all of them for their positive role in confronting the pandemic and bearing its burdens.
Accordingly, We issued instructions that the this budget be giving priority to the protection of citizens and residents health and safety, continuation of efforts to reduce the effects of this pandemic on our economy, continuation of work to stimulate economic growth, developing of services, supporting the private sector, preserving citizens jobs in it, implementing housing programs and projects, implementing developmental projects that provide more job opportunities for citizens, achieving the objectives of the Kingdom’s Vision, confirming raising the government spending efficiency, paying care to social protection, reducing depletion and waste practices and combating corruption.
We also emphasize effective implementation of the budget’s programs and projects.
We thank Allah for the unlimited good things He pours on us, trusting his help and assistance, and gearing forward to continue the march of economic growth and comprehensive development and as we proceed to this end.
May Allah's Peace, Mercy and Blessings be upon you."
Prince Abdulrahman bin Mohammed bin Ayyaf, Secretary General of the Cabinet, read the Royal Decree regarding the Budget.
Then, the Custodian of the Two Holy Mosques signed the Royal Decree on the Budget.
In a statement to Saudi Press Agency (SPA), Acting Minister of Media, Dr. Majid bin Abdullah Al-Qasabi pointed out that the Cabinet reviewed the statement of the Ministry of Finance and the financial results contained therein for the current fiscal year 1441/1442 AH. The statement included the main features of the general budget for the new fiscal year 1442/1443 AH (2021), which comes to emphasize the provision of all means to deal with COVID-19, restore the pace of economic growth, strengthen the system of support, social benefits and basic services, and adopt more appropriate policies in the balance between growth, economic stability and financial sustainability in the medium and long terms, while continuing efforts to develop non-oil revenues, spending efficiency and increasing the level of private sector participation, in light of the exceptional economic conditions for the fiscal year 2020 and the uncertainty associated with the crisis and its consequences that the global economy is still suffering from its effects.
The statement of the Ministry of Finance showed that the real oil output declined during the first half of 2020 at a rate of 3.3%, which is less than the local and international expectations for the Kingdom's economy, and is the least declining compared to other countries, especially the G20 countries, as a result of the positive effects of the effective measures taken by the government to address the health, financial and economic crisis. The statement stressed the Kingdom's keenness through its leadership role in OPEC in coordination with OPEC + countries to restore stability of oil markets, and through its presidency of the G20 by working to strengthen international coordination to adopt the necessary policies to support global economic growth and mitigate the least developed countries to deal with the crisis, these efforts succeeded significantly in alleviating the severity of the crisis on the global economy.
The statement reported that the preliminary estimates of the Year 2021 indicate a growth of the Real Gross Domestic Product (GDP) of about 3.2%, driven by an assumption of continuance of economic activates' recovery during the year, with an expectation of the public debt reaching about SR854 billion or a 34.3% of the GDP, by the end of the current year, to reach SR937 billion or 32.7% of the GDP by the end of the Fiscal Year 2021, reaching about SR1026 billion, in the Year 2023 or 31.7%, which are the levels that stand short of the set ceiling for the public debt at 50% of the GDP and with emphasis that the Ministry of Finance shall keep working through the National Center for Managing the Public Debt to provide the financing needs in accordance with the fiscal policy objectives and the public debt strategy.
The statement included the government reserves balance according to the statement of the Fiscal Year 2020 and that it shall be preserved at SR346 billion and that it shall be kept at the level of SR280 billion for the Year 2021 and SR265 billion for the Year 2023, while what have been earmarked for the general items in the 2020 budget that stood at about SR151 billion, SR186 for education, SR175 for health and social development.
The Ministry of Finance's statement has underscored that the fiscal policies shall continue to pinpoint the priorities of expenditure, and those of maximum economic return and working on strategies that would consolidate government spending stability to mitigate its exposure to the oil related revenues performance and that the endeavors of the government to indigenize various sectors and carry out new projects, in miscellaneous sectors to increasingly create job opportunities for the citizens, in addition to the continuity of the economic diversification process, backing up of promising economic sectors such as tourism, sports and etc., as these sectors may provide much more job opportunities.

Last Modified Date: 16/12/2020 - 7:22 AM Saudi Arabia Time


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