Saudi outlines trimmed 2012 budget
Revenues
are forecast at $187 billion, while expenditure is projected at $184
billion, allowing for a $3 billion surplus in 2012, still significantly
lower than $69.7 billion surplus realised in 2011
AP and Ahram Online, Tuesday 27 Dec 2011
Saudi Arabia hiked spending in 2011 to mediate a possible snow-ball effect of revolts in neighbouring countries (Photo: Reuters)
Saudi Arabia outlined on Monday a $187 billion budget for next year that projects a cut in both public spending and revenues.
It still allows the world's largest oil producer to come away with a surplus forecast roughly at $3 billion.
Under the budget announced by the Finance Ministry, revenues are
forecast at 702 billion riyals ($187 billion), while expenditures are
projected at 690 billion riyals, or 16.5 per cent below spending in
2011. The surplus realised in 2011 came in at 306 billion riyals ($69.7
billion).
Earlier in the year, as a wave of popular unrest ripped through the
Arab world, King Abdullah announced a roughly $130 billion public
spending plan that largely benefited the kingdom's lower income
population.
The funds were aimed at building hundreds of thousands of housing
units, as well as creating jobs, raising salaries and offering
unemployment benefits. The move came as popular pressure mounted against
autocratic Arab leaders, with the people complaining about soaring
living costs, a lack of opportunities for youth and a shortage of
affordable housing.
The 2012 budget prioritises spending on education at 24 per cent of
total expenditure, a 13 per cent increase over the budget last year.
Healthcare also sees a 26 per cent increase in the new budget, including construction of several new hospitals.
Saudi Arabia has managed to avoid the protests that led to the ouster
of the presidents of Tunisia and Egypt and the toppling of Libya's
longtime strongman. Other Gulf Arab countries have also faced their
share of tensions — most notably Bahrain — but none of the protests have
so far succeeded in shaking the foundations of the region's monarchies.
For 2011, Saudi public revenues came in at 1.1 trillion riyals while
expenditures totaled 804 billion riyals or 224 billion more than had
initially been forecast, the Finance Ministry said in a statement on its
website.
Economic growth is forecast at 6.8 per cent in 2011, an increase from
an estimated 4.1 per cent in 2010, the ministry said. This was driven by
the expansion in the non-hydrocarbon sector, estimated at 7.8%, pushed
by higher government spending and the private sector.
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