Mohammed Al-Jadaan, Saudi Minister of Finance, said the 2020 annual budget is focused on Vision 2030 projects, continued private sector stimulus, mega project implementation and Vision Realization Programs. This will result in greatly improved efficiency and effectiveness, with many large CAPEX infrastructure projects ending and public private partnership projects increasing, reducing demands on government spending.
The government will continue to enhance the efficiency of expenditure, both for operational and capital expenditure. These efforts seek to increase the quality of public services, and their economic and social returns throughout the medium term. The budget continues its focus on the education and health sectors. The budget allocation for the health sector reaches SAR 167 billion, whereas SAR 193 billion is allocated for the education sector, amounting to a combined 35% of the approved total spending.
“The budget demonstrates the government's keenness to enhance and sustain economic growth while ensuring fiscal sustainability. We have adopted economic policies that target the growth of non-oil GDP, improving the quality of services provided to our citizens, and raising the efficiency and effectiveness of government spending, especially social spending. Simultaneously, the government continues its steadfast commitment to empowering the private sector’s role in the economy, job creation and diversification of investment under the umbrella of Saudi Vision 2030 objectives,” Al-Jadaan said.
The 2020 budget statement shows notable growth in various economic sectors during 2019, including a growth rate in private non-oil GDP of 3.4% during the second quarter of the year. He also emphasized that the government will continue the implementation of its strategic objectives, aimed at economic diversification, by establishing a suitable environment for investment in promising sectors while providing a stable economic framework.
The medium-term revision of real GDP growth rate projections has indicated real GDP growth of 2.3% in 2020. Growth is expected to continue at the same pace over the medium term, he added.
The twenty-two private sector support initiatives targeting strategic sectors are bearing fruit in second quarter sector growth numbers. The sector of wholesale and retail trade, restaurants and hotels grew by 5.8%. The sector of transportation, storage and communications, which includes logistics and technical services, recorded a growth rate of 6.4%. In the sector of financial services, insurance and real estate, the growth rate was 5.4%. The sector of community, social & personal services sector including entertainment & sport, recorded growth of 7.4%. In addition, the construction sector has recorded a growth rate of 4.9%.
The budget statement reflects the government's efforts to reinforce transparency and improve efficiency in expenditure and fiscal performance while simultaneously focusing on the construction and delivery of the budget to achieve Vision 2030 goals, the finance minister concluded.
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