"Our economy is firm and it has sufficient strength to cope with the current economic and financial challenges," said King Salman. "We have sought through this budget and its programmes to improve the efficiency of capital and operational expenditures in the state, strengthen the situation of public finances, enhance their sustainability, give priority to developmental and service projects and programs that serve citizens directly, contribute to activating the role of the private sector and increase its contribution to the gross domestic product (GDP)."
Revenue is projected to reach SAR692 billion in 2017, a 31% increase from initial projections. Oil revenues are expected to increase by 46% and non-oil revenues are estimated to grow by 6.5%. The budget deficit is expected to reach SAR198 billion in 2017, reflecting 7.7% of the GDP. Combined, these efforts will move the kingdom closer to its Vision 2030 goal of balancing the budget by 2020.
Among upcoming reforms, announced in the 2016 budget, is a high decree that approves the mandate of the Committee on Financial and Economic Cooperation Council (GCC) for the introduction of 5% value added tax (VAT) starting from the fiscal 2018. The GCC countries have already agreed to implement selective taxes on tobacco, and soft and energy drinks during the current fiscal year 2017. The fiscal year for KSA runs from 31 December of one year to 30 December of the next year.
2017 budget expenditures will focus primarily on the following sectors:
- Education: SAR200 billion, covering public education, higher education and training.
- Military: SAR191 billion, to support and expand KSA's military capabilities.
- Economic resources and general programmes: SAR155 billion, including the expansion of the Grand Mosque in Makkah.
- Health and social development: SAR120 billion, to enable the construction and subsequent equipping of healthcare centres. Thirty-eight new hospitals are already in the process of being built.
- Security and regional administration: SAR97 billion. The establishment of naval bases for border control will be among the new projects under this budget.
- Municipality services: SAR55 billion.
- Infrastructure and transport: SAR52 billion, towards the building roads, ports, railway, airports, postal services and developing industrial cities.
- National Transformation Plan: SAR42 billion.
- Public administration: SAR27 billion, including 46 new initiatives.
Read the 2017 Budget (PDF)