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THE KINGDOM’S BUDGET FOR 1416-1417 H., CORRESPONDING TO 1996

HRH Crown Prince Abdullah Bin Abdul Aziz Al-Saud announced Saudi Arabia’s budget for 1996 on the 10th of Sha’ban 1416 H., corresponding to 1/1/1996. The budget projects government expenditure of SR150.00 billion (U.S. $40.00 billion) and government revenue of SR131.5 billion (US $35.00 billion). Hence, the 1996 budget deficit is estimated at SR18.5 billion (U.S. $4.93 billion). Second to the defense and security sector, education received the biggest slice of the pie with SR27.6 billion (U.S. $7.36 billion). The health services and social development sector received SR13.3 billion (U.S. $3.55 billion). Allocations for municipal services and water authorities stood at SR5.38 (U.S. $ 1.43 billion). Allocations for transportation and communication were SR9.19 billion (U.S. $2.45 billion). Table (1) shows a breakdown of the 1996 budget over the different Saudi economic sectors.

TABLE 1 *
SAUDI BUDGET ALLOCATIONS
FOR FISCAL YEAR 1416-1417H., CORRESPONDING TO 1996

(IN BILLIONS)

SECTOR RIYALS U.S. DOLLARS PERCENT

Defense and Security 45.33 12.09 30.20

Education (human resources) 27.62 7.36 18.40

Health and Social Services 13.32 3.55 8.89

Municipal Services and Water 5.37 1.43 3.58

Transportation and Communication 9.19 2.45 6.13

Infrastructure, Industry, and Electricity 6.11 1.63 4.08

Domestic Social Programs Subsidies 6.86 1.84 4.58

Specialized Public Lending Institutes 5.89 1.57 3.94

Public Organizations 30.31 8.08 20.20

* Source: Ministry of Finance and National Economy. Compiled by the Commercial Office of the Royal Embassy of Saudi Arabia, Washington, D.C.

The huge cost of the 1990 Gulf war, coupled with a decline in crude oil prices, posed enormous financial and organizational challenges to the Saudi economy. Consequently, the immense strain on the government finances in the first years of the fifth development plan had to be reduced during its final years. Since the end of the Desert Storm war, dedicated efforts have been made to consolidate the Kingdom’s budget and eliminate its deficits (see table 2). However, this caused a positive structural shift in the Saudi economy. Since 1990, the Saudi economy has been moving from a primarily budget driven economy to a private sector oriented one, with higher autonomous private sector demand and investment.

TABLE 2 *
SAUDI BUDGET ESTIMATES **
BILLION RIYALS/(BILLION U.S. $)

REVENUE EXPENDITURE SURPLUS/DEFICIT

1407-1408 (1987) 117.28 ($31.28) 170.00 ($45.33) - 52.7 (-14.06)

1408-1409 (1988) 105.30 ($28.10) 141.20 ($37.70) - 35.9 (- 9.57)

1409-1410 (1989) 116.00 ($30.93) 141.00 ($37.60) - 25.0 (- 6.67)

1410-1411 (1990) 118.00 ($31.47) 143.00 ($38.13) -25.1 (- 6.67)

1411-1412 (1991) ---------Extended budget of previous year *** --------------

1412-1413 (1992) 151.00 ($40.00) 181.00 ($48.53) - 30.0 (- 8.53)

1413-1414 (1993) 169.15 ($45.11) 196.95 ($52.52) - 27.8 (- 7.41)

1414-1415 (1994) 120.00 ($32.00) 160.00 ($42.67) - 40.0 (-10.67)

1415-1416 (1995) 135.00 ($36.00) 150.00 ($40.00) -15.0 (- 4.00)

1416-1417 (1996) 131.50 ($35.07) 150.00 ($40.00) -18.5 (- 4.93)

* Compiled by the Commercial Office of the Royal Embassy of Saudi Arabia in Washington, D.C.
** Saudi fiscal year commences on the 10th of Capricorn (December 31).
*** The 1411-1412 (1991) budget was not announced due to Desert Storm war.

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