Encouraging Factors Contribute to Budget Revenues Recovery in 3rd Q

Saudi Arabia: Encouraging Factors Contribute to Budget Revenues Recovery in 3rd Quarter

Contrary to the results of the second quarter; economic experts expected the Saudi budget to recover starting from the third quarter of 2020. This is thanks to major strategic factors that will contribute to raising the Kingdom’s revenues significantly.

Those factors include the lifting of the curfew imposed to counter the coronavirus pandemic; the improvement of oil prices; the raising of the value-added tax; and the cancellation of additional financial allocations in government spending to enhance potential financial savings.

Economic Advisor Yehya al-Hujairi said that the ceiling of expectations for the recovery of Saudi budget revenues in the third quarter was very high; as a result of the solutions and reforms that the state has adopted before and during the pandemic.

Optimistic return of economic activity

The expert pointed out that one of the most important boosters was the return of economic activity and the improvement of oil prices and value-added tax; as well as the removal of government allocations, all of which would enhance the state’s financial treasury.

For his part, Dr. Abdul-Rahman Baeshen, head of the Shorouk Center for Economic Studies, said that he felt very optimistic about the recovery of Saudi revenues over the past three months; based on positive data about coming investments and the revival of the private sector economically and commercially.

He also added that the Kingdom’s adoption of the comprehensive reform of economic; trade and investment policies; along with the launching of initiatives that support activities and production;

and the promotion of local content, were all factors that would strengthen the national economy in light of the continuing pandemic.

On a different note, latest monetary statistics also showed that the value of purchases by banks operating in Saudi Arabia of foreign exchange currencies amounted to SR756.7bn (S201bn); during the second quarter of this year, registering a decrease of 10.6% compared to the same period last year.