Riyadh forecasts GDP growth of 2 per cent

22 December 2016

Saudi Arabia’s GDP grew by 1.3 per cent in 2016

Saudi Arabia’s Finance Ministry has forecast GDP growth of 2 per cent for 2017 in its 2017 state budget announcement.

The ministry added that the growth can only be maintained if its economic reform programme continues, and without reforms, the ministry estimates that growth can only reach 1.2 per cent.

Saudi Arabia’s GDP grew by 1.3 per cent in 2016.

In 2018 GDP growth is expected to reach 2.1 per cent and if the reforms don’t get implemented the growth will only be 0.9 per cent, said the finance ministry in its 2017 budget statement.

Riyadh has said that economic growth can only be achieved if the economic reform programme, Vision 2030 and the National Transformation Plan, is implemented successfully.

The NTP, announced by Deputy Crown Prince Mohammed bin Salman al-Saud in late April, is hoped to radically overhaul the country’s economy. Subsidy cuts, tax rises, sales of state assets, a government efficiency drive and efforts to spur private sector investment are all part of the NTP.

In the 2017 budget the finance ministry also said that the kingdom expects a $52.8bn budget deficit in 2017, compared with $87bn in 2016. Riyadh also added that it will look to cut the deficit to SR198bn with the help of higher oil prices and non-oil revenues. Stronger revenues will allow Riyadh to boost spending following limited public spending over the past 18 months since the downfall of the price of oil. 

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