Riyadh - SPA
Ministry of Finance announces 2nd Quarter Performance Report of the state's budget for the fiscal year 2019

The Minister of Finance, Mohammed bin Abdullah Al-Jada’an announced
today, July 30, 2019, the 2nd Quarter Performance Report of the state's
budget for the fiscal year 2019. The fiscal data reflect improvement in
financial performance during the first half of this year compared to the
same period, which contributes to achieving the targeted results for
the current year.

The budget deficit during the first half of 2019 amounted to SR 5.7
billion, compared to SR 41.7 billion in the corresponding period of the
previous year. Total revenues increased by 15 % while total expenses
increased by 6 %.

The Minister of Finance explained that the results of the first half
of the year confirm the effectiveness of the financial and structural
reforms implemented by the government, including diversification of
government revenue sources through the implementation of initiatives
aimed at increasing non-oil revenues, as well as reforms of the
development of public financial management to raise the efficiency and
effectiveness of spending, which recently included the approval of the
Government Procurement Law. The results, also, reflect the progress in
executing development projects according to the Saudi Vision 2030.

Al-Jada’an stated that the government is in the process of achieving
a balance between the financial discipline and raising efficiency to
realize the financial targets for this year by controlling the deficit
rates in the budget and public debt, while implementing projects,
programs and initiatives aimed at raising the rates of economic growth
and the well-being of the citizens.

The Minister of Finance clarified that the report is a confirmation
of the government's commitment to transparency and financial disclosure,
and strengthening the governance and control of public finances, to
achieve the Financial Balance Program’s objectives.

The results of the financial performance for the first half of 2019
showed an increase in non-oil revenues by 14.4 % resulting from
improvement in economic activity and implementation of the reform
initiatives. Tax revenues on goods and services increased by 48 % as a
result of the increase in the revenues generated from VAT and the Expat
fees. Trade and international transactions increased by 10 % as the
economic activity improved. At the same time, oil revenues increased by
15 % compared to the same period last year, driven by the amounts
received from oil profits (should this be oil revenues?? Ed).

On the expenditures side, social benefits and employees'
compensation increased by 3 % each, compared to the same period last
year. Subsidies were more than doubled as a result of the implementation
of the private sector stimulus plan, led by the Consolidated Bill of
Support for Small and Medium Enterprises. The period witnessed a
continued increase of spending on social protection programs such as
Citizens' Accounts, social security, cost-of-living allowance and
student bonuses. Spending on health, social development and municipal
services increased by 13 % and 22 %, respectively. At the same time,
capital expenditure increased by 22 % with the progress in the
implementation of housing projects and other development projects.

The internal and external borrowing during the first half of the
year amounted to about SR 67.9 billion, which will be used to finance
part of the expected deficit until the end of the year. The Debt Balance
as at the end of June 2019 amounted to SR 627.8 billion.

As for the results of 2019 2Q, revenues amounted to about SR 260.706
billion, and the expenditures amounted to nearly SR 294.226 billion.
The budget deficit during the 2Q was about SR 33.52 billion.

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