Saudi Arabia: Budget divergence persists
The Kingdom of Saudi Arabia has set a smaller budget for 2021, a 7.3% YoY cut from 2020, as it seeks to maintain fiscal consolidation. This week, we analyse the government's shift from being the main provider of services to using its investment vehicles to help propel diversified domestic growth, focusing on:
- The role of privatisation plans, bold VAT and custom measures, in supporting recovery.
- The additional stimulus provided by the Public Investment Fund (PIF) as government spending exigencies persist.
- The government's plan to finance its deficit through the use of a balanced mix of foreign reserves and debt issuance.
Florence Eid-Oakden, Ph.D, Chief Economist
Ghalia Al Bajali, Analyst
The Country Views series shines the spotlight on specific developments in MENA countries, analysing them from a local perspective to deliver forward looking views for businesses and investors.
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