On October 1, the Ministry of Finance (MoF) of Saudi Arabia published its annual pre-budget statement for the fiscal year 2021.The final budget statement is expected by the end of the year.
Uncertainty regarding the pandemic could lead to revised estimates as well as additional fiscal adjustments, including in the form of budget re-prioritisation.
The pre-budget statement for the fiscal year 2021 highlights the impact of lower oil prices and the pandemic on the Saudi economy. Some Vision 2030 and FBP targets have been revised.
The Kingdom’s medium-term priorities include Vision 2030 initiatives, privatisation and PPP, maintaining social spending, and building non-oil sectors through more investments by the Public Investment Fund. These priorities create further growth opportunities, post-COVID.
We see the double whammy impact of lower oil prices and the pandemic as a factor that reinforces the need to diversify, even though it might cause timeline revisions and possible scale-down of certain projects.
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