Riyadh – Mubasher: Saudi Arabia’s higher government expenditures are expected to offset the impact of oil output cuts during the first half of 2019, the World Bank said in a report.
The kingdom’s economic growth is forecast to slow down to 1.7% in 2019, but then recover to more than 3% in 2020 “as oil production cuts are reversed, and as large infrastructure projects generate positive spillovers to private sector growth,” the report added.
In 2018, Saudi economy grew 2.2%, boosted by an increase in oil revenues combined with higher public spending.
Additionally, fiscal deficits are projected to gradually shrink; however, achieving a balanced budget by 2023 will rely on a sizable rise in oil revenues or “sustained fiscal consolidation,” the World Bank noted.
“The 2019 budget continues the expansionary fiscal policy adopted since 2017, while being sensitive to oil price outcomes for deficit reduction,” the report indicated.
