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Saudi Arabia last year launched its Vision 2030 program aimed at transforming its economy and ending its dependency on oil. One aspect of this was the Fiscal Balance Program (FBP) which intends to invigorate the non-oil sector and reduce damaging inefficiencies in government spending.
The FBP is intended to balance the budget by 2020. Last year’s deficit appears to have hit a staggering SR402bn ($107bn) once delayed payments are factored in. But Saudi investment bank Jadwa thinks that the FBP may bring immediate improvements worth SR100bn ($26.6bn) this year alone.
The biggest savings are expected to come from wage reforms, with the government implementing a pay freeze for public sector workers and canning bonuses for the financial year which began on 2 October ( MEES, 7 October 2016 ). Jadwa reckons these measures will save the kingdom SR55bn ($14.7bn) this year alone. The next largest chunk of savings is slated to come from energy price reforms, which could save the government SR29bn ($7.7bn). Hefty energy subsidies were cut in January 2016 ( MEES, 8 January 2016 ) and more reforms are slated for this year. (CONTINUED - 270 WORDS)