Saudi bud­get to raise do­mes­tic fuel prices

Kuwait Times - - BUSINESS -

Saudi Ara­bia’s state bud­get for 2017, which is ex­pected to be re­leased to­day, will boost spend­ing to sup­port eco­nomic growth while rais­ing do­mes­tic en­ergy prices to ease the gov­ern­ment’s sub­sidy bur­den, sources told Reuters. The gov­ern­ment is ex­pected to an­nounce its bud­get deficit fell sharply this year to 297 bil­lion riyals ($79.2 bil­lion), the sources, who are fa­mil­iar with the bud­get plan­ning, said yes­ter­day.

That would al­low Riyadh to claim sub­stan­tial suc­cess in its bat­tle to re­duce a huge deficit caused by low oil prices. The deficit to­taled a record 367 bil­lion riyals in 2015, and the orig­i­nal bud­get for this year pro­jected a 326 bil­lion riyal gap. The fi­nance min­istry did not re­spond to a re­quest for com­ment yes­ter­day. The sources said the num­bers which they quoted were not fi­nal and could still be mod­i­fied, but that they did not ex­pect any ma­jor changes.

Gov­ern­ment rev­enues to­taled 528 bil­lion riyals in 2016, slightly higher than the 514 bil­lion orig­i­nally pro­jected, while spend­ing was 825 bil­lion riyals, slightly lower than the 840 bil­lion in the orig­i­nal plan. The 2017 bud­get plan sets spend­ing of 890 bil­lion riyals, 6 per­cent higher than the orig­i­nal pro­jec­tion for spend­ing in 2016. Rev­enues next year are pro­jected at 651 bil­lion riyals, up from 514 bil­lion. The higher spend­ing would per­mit gross do­mes­tic prod­uct growth to ac­cel­er­ate to 2.0 per­cent in 2017 from an es­ti­mated 1.7 per­cent this year, the sources said. —

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