البيان التمهيدي لميزانية 2025.. 4.7% نموا متوقعا للاقتصاد السعودي في 2025
Developments in the Saudi economy
The introductory statement said: It has witnessed tangible positive developments in the past few years, with the continued shift towards diversifying the economic base and enhancing the growth of non-oil activities.
He explained that this reflected positively on the rise in employment levels, and then the unemployment rate decreased, and contributed to the growth of consumption and private investment.
GDP growth
He expected that the real GDP in 2024 would record a growth of 0.8%, supported by the growth of non-oil activities, which is expected to record approximately 3.7%. This is reinforced by the positive economic indicators witnessed in the first half of the current year, especially related to consumption and private investment, and enhancing Privatization, improving the work environment, and empowering women and youth, in addition to the strategies and projects of Saudi Vision 2030.
He stated that the recent decline in interest rates is expected to contribute to an increase in demand, which may positively affect economic growth.
Private consumption rate
According to the preliminary statement of the 2025 budget, the rate of private consumption witnessed a growth of 2.4% in the first half of the year 2024 AD, driven by the contribution of wholesale and retail trade activity, restaurants and hotels, in addition to facilitating the procedures for visas to visit the Kingdom and expanding the categories eligible for them, and its implications for increasing the number of visitors to entertainment and cultural events. And tourist destinations.
According to the statement, the average consumer price index increased by 1.6% from the beginning of the year 2024 until August of the same year compared to the same period last year.
Preliminary expectations indicate that the consumer price index for the entire year 2024 will reach about 1.7%. The Kingdom has maintained acceptable levels compared to global inflation thanks to the continuous improvement in its economic conditions, in addition to the proactive measures and policies taken by the government to contain rising prices, which included setting a ceiling on gasoline prices and raising the level of food stock availability.
Non-oil activities
The preliminary statement indicated that the positive performance witnessed by non-oil activities was reflected in labor market indicators.
Labor force survey data issued by the General Authority for Statistics showed a decline in the total unemployment rate to 3.3% by the end of the second quarter of 2024, compared to about 4.1% by the end of the second quarter of 2023.
Historically low unemployment rate
The unemployment rate among Saudis fell to its lowest historical level, reaching 7.1% in the second quarter of 2024, compared to 8.5% in the second quarter of 2023, approaching the Saudi Vision 2030 target of 7%.
The introductory statement stated that these positive developments came as a result of the efforts of the Saudi government to establish incentives and enablers to encourage the business sector, in addition to empowering citizens and enhancing their skills by providing new work patterns and creating job opportunities in various sectors.
High rates of women’s participation in the labor market
According to the statement, the past years have witnessed a continuous increase in women’s participation rates in the labor market. It reached 35.4% in the second quarter of 2024, compared to about 19.3% in the fourth quarter of 2016, exceeding the Saudi Vision 2030 target of 30% and approaching the new target of 40%.
This reflects the efforts made during the past period to empower women, increase their contribution to the Saudi economy, and enhance their leadership role.
The preliminary statement pointed out that the total number of Saudi workers in the private sector increased by 4.1% by the end of the second quarter of 2024, by about 92 thousand workers compared to the end of the second quarter of 2023, bringing their total number to 2.3 million workers.
Reforms and initiatives
This came as a result of the reforms and initiatives adopted by the government that led to the creation of new and quality job opportunities in various sectors such as tourism, entertainment and digital technology, supporting and encouraging entrepreneurship for small and medium enterprises, and working to stimulate emerging sectors such as: renewable energy and the green economy.
The preliminary statement for the 2025 budget issued by the Ministry of Finance expected that the positive performance of the real GDP will continue in the year 2025 AD. Preliminary estimates indicate that it will achieve growth of 4.6%, driven by the growth of the domestic product of non-oil activities. This reflects the Kingdom’s commitment to implementing its ambitious strategies and achieving sustainable development, increases investor confidence and enhances the position of the Saudi economy at the regional and international levels.
According to the statement, the programs to achieve Saudi Vision 2030 continue to achieve its goals in building a vibrant society and a prosperous economy that everyone can enjoy in an ambitious nation, by improving the quality of life, developing infrastructure, creating job opportunities, developing the financial sector, and other various development goals.
Public Investment Fund
The statement indicated that the Public Investment Fund continues to enhance the Kingdom’s revenues through its local, regional and international investments. Its strategy focused on maximizing its assets, launching new and promising strategic sectors in the Kingdom, in addition to localizing technologies and transferring knowledge, empowering the local private sector, and establishing strategic economic partnerships at all local, regional and international levels.
At the end of August 2024, the Fund achieved an increase in the volume of assets it manages, which amounted to about 3.47 trillion riyals, an increase of 21% compared to 2.87 trillion riyals at the end of 2023.
The Fund contributed to the creation of more than 1.1 million direct and indirect job opportunities locally and globally, in addition to establishing 95 local companies in many sectors since 2017.
Increased private sector participation and continued growth in a group of promising sectors have contributed to reducing the impact of oil market fluctuations on the local economy. This reflected positively on the expectations of international organizations for the performance of the Saudi economy, despite the challenges facing the global economy.
Saudi economy growth 4.7%
He stated that the International Monetary Fund expected the global economic growth to reach 3.3% by 2025, while it expected the Saudi economy to witness growth of 4.7%.
The preliminary budget statement said: The National Development Fund has played a pivotal role in enhancing economic stability and supporting national development since the launch of Saudi Vision 2030.
The fund aims to raise the level of performance of development funds and banks in the Kingdom and enhance their sustainability in a way that serves development priorities and economic needs and ensures optimal investment of capital and its investment in sustainable projects with a promising impact.
The preliminary statement expected that the Kingdom’s trade balance would witness a noticeable improvement due to the increase in non-oil exports, which recorded an annual growth rate of 65% during the first half of the year 2024 AD compared to the same period in 2016 AD, and the reduction of dependence on imports.
This expected improvement comes within the framework of the continued implementation of Saudi Vision 2030 initiatives, which aim to diversify the economy and enhance investments in non-oil sectors.
Private investment achieved an annual growth rate of 4.5% in the first half of the year 2024, while net foreign direct investment during the first half of the year 2024 reached the level of 21.2 billion riyals.
It is expected that private investment will continue to achieve positive growth rates for the year 2024 and the medium term. It is considered one of the most important drivers of positive growth expectations in the coming years, and an important axis in the plan to diversify the Kingdom’s economic resources.
Public finance estimates for the year 2025 and the medium term
The report stated that as a result of the government adopting expansionary spending policies that support economic growth with the aim of diversifying the economic base and focusing on sectors with sustainable economic and social returns, while continuing to achieve initiatives related to Saudi Vision 2030, it is estimated that the budget will record a deficit of about 2.3% of the gross domestic product in the year. 2025 AD, with the expectation that budget deficits will continue to be recorded in the medium term at relatively similar levels.
According to the preliminary statement, the 2025 budget reflects the Saudi government’s determination to advance at a faster pace in implementing reforms and developing policies, in addition to expanding transformational spending aimed at promoting sustainable economic growth. Which contributes to enhancing the quality of life.
Expected revenues for the 2025 budget
Preliminary expectations indicate that total revenues in the year 2025 will reach about 1,184 billion riyals, and it is estimated that total revenues will grow to reach about 1,289 billion riyals in the year 2027, supported by expectations of local and global economic growth.
The government will continue to implement initiatives and reforms in the economic and financial aspects within Saudi Vision 2030 in an effort to diversify the economy and enhance non-oil revenues.
Expected expenditures for the 2025 budget
The preliminary statement for the 2025 budget expected that total expenditures would reach about 1,285 billion riyals in the year 2025 AD. That is, representing about 29.5% of the GDP, and 1,328 billion riyals in the year 2026 AD, representing 30.0% of the GDP, reaching approximately 1,429 billion riyals in the year 2027 AD, representing 30.3% of the GDP.
The government is continuing its efforts to enhance the sustainability of public finances and achieve comprehensive development goals, through periodic review of estimates of expenditure ceilings in the medium term in accordance with local and global financial and economic developments within the framework of the financial space available in the long-term financial planning project.
The government continues to spend on basic services for citizens and residents, in addition to enhancing the quality of life and developing government services in the fields of education, health, and social development, as well as developing infrastructure in various regions of the Kingdom, while empowering the private sector, developing local content and national industries, and stimulating the investment environment to achieve development. Overall.
Finance and public debt
The economic and financial developments taking place in Saudi Arabia were reflected in its credit ratings. The credit rating agency “Fitch” confirmed the Kingdom’s rating at “A+” with a “stable” outlook, and the credit rating agency “Moody’s” confirmed its rating of the Kingdom at “A1” with a “positive” outlook. Standard & Poor’s also confirmed its credit rating for the Kingdom at “A” while amending the future outlook from “stable” to “positive”, as a result of the government’s adoption of financial policies that contribute to maintaining financial sustainability and the efficiency of financial planning.
The Kingdom enjoys a strong and solid financial position represented by the presence of financial reserves and sustainable levels of public debt that contribute to enabling the government to face any future challenges and secure its financing needs in the short, medium and long term from various local and global markets.
The government is working to continue meeting financing needs in accordance with the approved annual borrowing plan to finance the expected budget deficit and to pay the principal due in 2025, in addition to searching for available opportunities according to market conditions to proactively implement additional financing operations to pay the principal due for the coming years, and to finance some Strategic projects, and taking advantage of market opportunities to implement alternative government financing operations that would enhance economic growth, such as financing capital projects and infrastructure, to diversify financing channels in order to maintain the efficiency of markets and enhance their depth.
The most prominent risks to public finances for the year 2025 and the medium term
The process of analyzing the public financial risks facing the Saudi economy represents a major factor in understanding the factors that may lead to deviation from public financial expectations for the year 2025 and in the medium term. Which will contribute to adopting effective precautionary policies and strategies to proactively deal with these risks and mitigate their effects on the local economy.
The expansionary financial policy adopted by the Kingdom’s government contributed to reducing the effects of rising interest rates on the private sector and individuals. The increase in employment has reduced the decline in consumer loans, and the expansion of capital projects has contributed to the growth of credit granted to the private sector.
The expansion of strategic government spending and the continuation of borrowing operations according to the Kingdom’s strategic directions and in accordance with Saudi Vision 2030 will contribute to supporting the growth of non-oil activities in the medium and long term. Public finances are also characterized by flexibility and the ability to face pressures if the need arises in the medium and long term.
Saudi Arabia continues its efforts to enhance the flexibility of the economy to overcome many of the challenges it has faced in recent years, and the impact of this has become clear on inflation rates, which have stabilized at relatively acceptable levels compared to countries around the world.
The Saudi economy is affected by global developments like any other economy. This requires providing sufficient financial space to help confront these shocks. Therefore, the Kingdom worked on long-term financial planning that contributes to enhancing economic stability, supporting sustainable growth, and creating an attractive investment environment for investors, which enhances economic development in the medium and long term.
للمزيد : تابع خليجيون 24 ، وللتواصل الاجتماعي تابعنا علي فيسبوك وتويتر
