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On Dec. 18, ºÚÁÏÉçÇø announced its 2019 fiscal budget, with record expenditure exceeding SR1 trillion ($266.5 billion). This shows remarkable progress in implementing various economic and social reforms in the four years since King Salman came to power.
The budget also shows very strong revenue generation, which is expected to rise to SR975 billion. The budget deficit is estimated at SR131 billion, 4.2 percent of the gross domestic product (GDP), which is lower than the expected deficit of SR136 billion in 2018 (4.6 percent of the GDP).
The statement report that was released to the public on the day the 2019 budget was announced shows significant social, economic and developmental progress, most notably an increase in oil and non-oil revenues (reducing dependence on oil is a major objective of the Vision 2030 reform plan).
Non-oil revenue contributed around 8 percent to total government revenues in 2012, and is expected to contribute more than 32 percent in 2019.
Among the major social reforms that are seeing significant progress are housing efforts under the Sakani program, which aims to increase home ownership among Saudis by providing financing solutions.
Sakani has contributed to reducing the waiting list of beneficiaries at the Real Estate Development Fund by 48 percent.
The government is showing commitment to Vision 2030 by setting a ceiling for the national budget in the medium term (three years), ensuring compliance with that ceiling, reviewing and developing policies and procedures to prepare and implement the budget, and applying disclosure and planning standards in line with international best practice.
The efficiency of capital expenditure is being increased by reviewing government projects and priorities to ensure high quality, efficient execution and alignment with financial priorities and the Kingdom’s needs. The efficiency of operational expenditure is another major reform, including the rationalization of government agencies’ expenses and embracing the latest technology to deliver services.
In addition, the government’s procurement system is being reviewed to make sure it is in line with international best practices, and transparency standards are being developed and established.
The 2019 budget has shown a strong commitment to the government’s social and economic reforms, especially those that address Saudis’ needs such as housing, health, education and public services. The government is also enforcing greater fiscal disclosure and transparency. But despite efforts to move away from an oil-based economy, the government is faced with the challenge of reducing the unemployment rate, which is currently 12.9 percent.

Talat Zaki Hafiz is an economist and financial analyst.