the Ministry of Finance and National
On the National Budget
FY 1420/1421 (2000)
The Ministry of Finance and National Economy is pleased to highlight recent
economic developments, the 2000 budget and the outcome of the 1999 budget.
RECENT ECONOMIC DEVELOPMENTS
Gross Domestic Product:
GDP is estimated to grow by
8.44 percent in current prices in 1999 mainly as a
result of the recovery of
oil prices specially in the second half of the year, reaching
billion compared to SR 480.8 in 1998. Private sector GDP is estimated
by 2.4 percent in current prices and by 2.0 percent in constant prices with
share of 38 percent of total GDP in current prices and 48 percent in
prices. Non-oil industrial sector is estimated to grow by 6.3
percent and construction
by 2.1 percent in current prices. Electricity, gas,
and water sector is estimated to
grow by 3.9 percent, and transport and
communication sector by 2.4 percent in
continued expansion of the private sector, an increase in its efficiency and
less dependence on government spending. In particular, the non-oil industrial
sector has witnessed a robust growth for several years.
General Price Level:
Inflation, as measured by the cost of living index, is estimated to decline
by 1.2 percent in 1999, while the non-oil GDP deflator is estimated at 0.98
Balance of Payments:
The deficit in the current account is estimated to drop by 70.3 percent in
amounting to SR 14.6 billion compared to SR 49.2 billion in 1998 as a
result of the increase in oil prices, government policies to rationalize
spending, and the decline in private transfers. Non-oil exports are estimated to
grow by 1.6 percent in 1999 totaling SR 23.8 billion due mainly to improvement
in petrochemical prices. Imports are estimated to drop by 0.2 percent amounting
to SR 102.8 billion.
The government financial and monetary policies continue to be governed by the
objective of maintaining stable prices and stable exchange rate. The broad money
supply during the first ten months of 1999 grew by 0.9 percent reaching SR 284.7
billion. The growth in money supply is attributable to the increase in oil
prices and the decline in private sector balance of payment deficit. This modest
growth coincided with a decline in consumer price index.
The Banking Sector:
Banks continue to strengthen their financial positions; their capital and
reserves increased by 4.7 percent in the first ten months of fiscal year 1999
reaching SR 42.1 billion by the end of October 1999. The average risk-weighted
capital to assets ratio is 21.1 percent, which is about 2.5 times the
The Share Market:
The share market has improved considerably during 1999 compared to 1998. The
NCFEI share index stood at 1974 as of December 16, 1999 compared to 1413 at the
beginning of 1999. This represents an increase of 39.7 percent.
Consistent with the government policy towards the private sector, the Council
of Ministers approved the final stage of privatizing the power sector. The
council also initiated the privatization of the utility services currently
provided by the Royal Commission for Jubail and Yanbu. The Ministerial Committee
for Privatization is reviewing other proposals.
OUTCOMES FOR FISCAL YEAR 1419/1420 (1999)
The following budgetary outcomes were achieved during 1999:
- Revenues: SR 147 billion
- Expenditures: SR 181 billion
- Deficit: SR 34 billion
THE NATIONAL BUDGET FOR 1420/1421 (2000)
The main features of the 2000 budget
- Total revenues for the fiscal year 2000 are projected at SR 157 billion.
- Government expenditures for the fiscal year 2000 are budgeted at SR 185
- The deficit for the fiscal year 2000 is projected at SR 28 billion.
- The new budget includes new programs and projects amounting to SR 8
The principal appropriations for the main
development and public service
sectors for 1420/1421 are as follows:
- SR 49.4 billion for education including vocational training sectors.
- SR 19.9 billion for health services and social development.
- SR 7.1 billion for municipality services and water authorities.
- SR 5.6 billion for transportation and communication.
- SR 9.1 billion for infrastructure, industry.
- SR 5.5 billion for social transfers, subsidies and
Specialized Development Institutions
In addition, the
Specialized Development Institutions (the Industrial Development Fund, the
Agricultural Bank, the Real Estate Development Fund, the Credit Bank, and the
Public Investment Fund) will continue providing loans to development projects
and services in the areas of industry,
agriculture, and real estate. The
loans to be provided by these institutions in year 2000 are projected at more
than SR 6 billion.