Riyadh – Mubasher: The International Monetary Fund (IMF) said it expects Saudi Arabia's non-oil revenues to rise in 2016, while the fiscal deficit is projected to decline to 13% of gross domestic product (GDP) this year.
The fiscal deficit will likely be financed through a mix of deposit drawdown and domestic and international borrowing, the fund added in a statement published on its official website.
"Spending restraint, particularly on the capital side, will result in a substantial reduction in expenditure," the IMF highlighted, adding that the current account deficit is expected to narrow to 6.4% of GDP in 2016.
The current account deficit will then move close to balance by 2021 as oil prices partially recover, the statement added.
Responding to falling oil prices, Saudi Arabia has begun a fundamental policy shift with the government introducing a series of reforms over the past year added to its ambitious transformation under the Saudi Vision 2030 and the National Transformation Programme (NTP).
"Diversifying the economy, creating jobs for nationals in the private sector, and implementing a gradual, but sizable and sustained fiscal consolidation to reach budget balance in 5 years are key policy priorities," the IMF noted.
