Saudi Arabia is opening up the spending taps as it capitalizes on its much-improved fiscal position. The move comes despite Finance Minister Muhamad al-Jadaan having previously pledged that the oil-price windfall wouldn’t result in looser fiscal policy. It’s unclear where the additional revenues will be directed, but Riyadh had already shifted most capital expenditure off its balance sheet by delegating it to entities such as the PIF sovereign wealth fund.

In its pre-budget statement for 2023 released on 30 September, the Ministry of Finance unveiled updated guidance for 2022-24, as well as its first outlook for 2025. Planned expenditure was ramped up by 18% ($40bn+) for each year and is now expected to surge by $24.8bn to an eight-year high $302bn for 2022 (see table). Rampant economic growth of 8.0% is forecast for this year thanks to surging oil prices (see chart 1), before dropping back to a still-strong 3.1% in 2023 and then accelerating back to 6.0% in 2024. (CONTINUED - 1217 WORDS)