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  • 08-05-21

    Saudi Arabia posts budget deficit of USD2B in Q1 2021

    (MENAFN)According to Moody’s Investors Service, Saudi Arabia’s sharply narrower first-quarter budget shortfall was partly a result of structural improvement in the government’s finances and therefore credit positive.

    During an emailed report, Moody’s stated that structural factors like higher VAT and lower capital spending were also responsible as much of the drop in the budget deficit was a result of higher oil prices and a seasonal decline in spending.

    Saudi Arabia recorded a budget deficit of USD2 billion in the first three months of 2021, dropped from USD29 billion in the last three months of 2020 and USD9 billion in the first three months 2020.

    Moody’s further indicated that “The structural improvement reduces the fiscal exposure to fluctuations in global oil demand and prices.” If continued, it will help overturn part of the fiscal deterioration that was held in 2020 due to the Coronavirus shock and detain a further significant deterioration in the government’s balance sheet.

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