Riyadh - SPA
The Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud chaired at his Palace in Riyadh yesterday the Cabinet's session in which the state's budget for the new fiscal year 1434/1435AH was approved.
The session began with recitation of verses from the Holy Quran. Then the King announced the opening of the Cabinet saying:
'In the name of Allah, Most Gracious, Most Merciful, May Allah's peace and blessings be upon the Prophet, his family and companions.
With the blessing of Allah Almighty, we announce the opening session of the Cabinet to announce this year's budget. May Allah make the budget confer goodness and blessings to the Saudi people in general and Muslims. Thank you. '
The Cabinet discussed and approved the state's budget for the fiscal year 1434/1435 AH.
In an address to Saudi citizens, the King delivered the following speech:
'In the name of Allah, Most Gracious, Most Merciful,May Allah's peace and blessings be upon our Prophet, his family and companions.
Dear brothers, Citizens, Sons and daughters of our homeland, May Allah's Peace and blessings be upon you.
Words are incapable to express my feelings towards you and your support for me during the last period. I sought help from Allah Almighty with dependence on him, determination and patience, in addition to your prayers and love that affected me deeply in my heart. With Allah's grace and your support I managed to overcome many difficulties.
'Dear Fellow Citizens:
Today, thanks and praise to Allah Almighty and with His guidance, we announce the budget of the next fiscal year, whose expenditure amounts to SR820 billion (eight hundred and twenty billion Saudi riyals.) It features continuation to funding of the programs, and projects that were designed to support our development and progress journey, for the benefit of this country, and its honorable people. More job opportunities will be created for the citizens. Public services will be improved. We confirm our commitment to invest resources that Allah Almighty has bestowed on our country to maintain its natural position, and to meet your requirements.
The budget included new programs and projects, besides proceeding with implementation of existing projects, in all sectors of human development, infrastructure, and social services. Budget allocations are two hundred and eighty five billion riyals in total.
Human resources development and investment in human welfare are the core of the overall development. Also, over two hundred and four billion riyals have been allocated for the general course of education, higher education, workforce training and improving the educational environment, in line with modern requirements. New schools and training centers will be established. Compounds of existing universities will be completed. New uni-domain dedicated
colleges will be opened.
Considering the importance of health services and social welfare for all segments of the society, hundred billion riyals has been allocated to complete construction and procurement of equipment for primary health care centers, and establishing of nineteen new hospitals and five medical cities in all regions of the Kingdom, without exception. Clubs and sports facilities, and social welfare and observation and rehabilitation facilities will be established. Support to social security programs will be provided.
Nearly thirty six billion riyals have been allocated to municipal services, and sixty five billion riyals for the transportation and infrastructure. More than fifty seven billion riyals are allocated to water, industry, commerce and economic resources.
Funds have been allocated for developing the judiciary system, implementation of the National Plan for Science and Technology, and the 'National Plan for Telecommunications Technology and Information Technology'. Categorized development funds and banks will continue lending of various activities in support of development, and stimulation of commercial financing.
We stress that this budget, like its predecessors, is based on maintain fair balance among various regions of the country with respect to development and welfare. Government officials are instructed to proceed with financial and economic reform.
Hope is clinched on you after Allah Almighty. So, I ask all of you pool all possible efforts and forge partnership with the State in the above mentioned areas, taking into account the interests of the nation and citizens.
As you remember, ten years ago Saudi Arabia was indebted with more than SR685 billion, that wreaked a heavy burden on the State and delayed completion of many infrastructure plans. Few years ago, we started to secure and save reserves that were meticulously and correctly invested.
I would like to tell ministers and officials in all sectors that no one is excused for any negligence/carelessness as of today.
You have to know that you are also responsible before Allah Almighty and then before me of any negligence that jeopardizes the State's strategy to which we have referred above. Every minister and official should appear in the media in order to give detailed and accurate account of his sector.
I appeal to Allah Almighty to make your work a success.
Alsalamu Alaykum Warahmatu Allahi Wabarakatu.'
Then, the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud directed princes and ministers to work sincerely to achieve the provisions of this budget in the right way in order to achieve the welfare of the citizens in all spheres of lives.
The minister of finance, upon the directives of the King, provided a brief presentation on the new budget. He highlighted the global and local economic situations and their respective developments, the financial outcomes of the current fiscal year 1433/1434H and the main features of the new budget, as follows:
Upon the directives of the Custodian of the Two Holy Mosques and the importance of enhancing the process of development and encouraging the investment environment which will create more job opportunities for citizens and boost economic growth, the budget for the next fiscal year 1434/1435H continues concentration on developmental projects for the sectors of education, health, security, social and municipal services, water and sanitation, roads, e-services and support of scientific research.
Dr. Al-Assaf added that the budget included new programs and projects and additional phases for some of the existing projects. The total budget allocations amount to SR285,000,000,000 (two hundred eighty five billion Saudi Riyals).
As usual, there is coordination between the Ministry of Finance and the Ministry of Planning and Economy regarding approved programs and projects in the 9th developmental plan that started in the fiscal year 1431/1432H.
Dr. Al-Assaf added that GDP for 1433/1434H (2012) is expected to reach SR 2,727,400,000,000 (two thousand seven hundred twenty seven billion and four hundred million Saudi Riyals) at the current prices with an increase of 8.6% compared to last year 1432/1433H (2011). The GDP for non-oil sector, both government and private sectors,
is expected to grow at a rate of 11.2%. The governmental sector is expected to grow by 10.6% and the private sector is expected to grow by 11.5% at the current prices.
Dr. Al-Assaf added that, based on the fixed prices for this year, the GDP is expected to grow at 6.8% as the oil sector is expected to grow at 5.5%. The domestic production for non-oil sector is expected to reach 7.2% as the governmental sector is expected to grow at a rate of 6.3% and the private sector at 7.5%. Thus, the contribution of the private sector in the GDP reaches to 58%.
All economic activities components of the domestic production for non-oil sector achieved a positive growth. It is estimated that the real growth of non-petroleum down stream industries is to reach 8.3%, the activity of communications, transport and storage (10.7%), electricity, gas and water (7.3%), building and construction (10.3%), wholesale and retail trade, hospitality industry (8.3%) finance, insurance, real estate and business services (4.4%).
The minister of finance said that the index of living cost, the most important indicator for the general level of prices,
increased during the year 1433/1434H (2012) by (2.9) in comparison with what it was in 1432/1433H (2011) according to methodology, commodity basket, new services and the base year (2007).
According to the old methodology and the base year (1999), the change represents 4.5% for the same period. The deflator of GDP for the non-oil sector, which is one of the most important economic indicators to measure inflation at the level of the economy as a whole is expected to grow at a rate of 3.8% in the year 1433/1434H (2012) in comparison with last year.
Minister of finance added that the size of public debt is expected to drop to SR98,848,000,000 (ninety eight billion eight hundred forty eight million Saudi Riyals) by the end of the current fiscal year 1433/1434H (2012), representing 3,6% of the expected GDP for the year 1433/1434H (2012) as compared to SR135,500,000,000 (one hundred thirty five billion five hundred million Saudi Riyals) in 1432/1433H (2011).
The minister added that a report of the International Monetary Fund for 2012 lauded KSA economic policies, citing investing of oil high revenues into acceleration of progress towards achieving the objectives of local development. The executive directors of the fund welcomed KSA efforts to ensure stability of oil markets.
They also commended the government's efforts to strengthen financial monitoring and risk management. They also welcomed the improvements in the system of combating money laundering and terrorist financing.
The minister added that a report of the Group of 20 (G20) showed that the Kingdom ranked first among G20 members in terms of implementation of the commitments of the group, citing structural reforms, fiscal discipline, financial institutions reforms, regulating of financial markets, resisting trade protectionism and progress in the implementation of the development agenda.
Standard and Poor's agency for credit rating announced that the Kingdom retains its high sovereign credit rating (AA-) with a stable outlook. This announcement comes as a confirmation of the strength of the Saudi economy and the strength of its financial position at global level.
The Custodian of the Two Holy Mosques thanked Allah Almighty for bestowing this country with uncountable blessings, describing today's budget as entirely good for this country and its people.
The King urged and directed all officials to observe Allah Almighty at all times and everywhere, and to serve their religion and the homeland.