Saudi cabinet approves kingdom’s state budget for new fiscal year

New FY budget hits SR540b, up by 14% from previous budget

Custodian of the Two Holy Mosques: We were keen on having budget as one bolstering march of sustainable development

Three decrees issued to outline details of expenditure, revenues

The Cabinet held a session presided over by Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud and approved the general budget of the state for the fiscal year 1431/1432 H.

In a statement to Saudi Press Agency, Minister of Culture and Information Dr. Abdulaziz bin Mohyeddin Khojah said, 'At the directives of the Custodian of the Two Holy Mosques, the cabinet discussed in this session the general budget of the state for fiscal year 1431-1432 H. and approved it.'

Then, Custodian of the Two Holy Mosques delivered a speech in which he announced the budget. The following is the king's speech delivered by Secretary General of the Cabinet Abdulrahman bin Mohammad Alsadhan.

'With Allah's help and guidance and with praise to Him, We announce the budget of the new fiscal year 1431/1432 H. which amounts to 540 billion riyals, which shows an increase of 14% over the estimated budget of last year 1430/1431 H.

When prepared, the budget took into consideration the continuation of boosting sustainable development in our beloved country despite the international economic circumstances which led to the decrease of the prices of oil and quantities of its exports.

This will be implemented through directing resources to be spent on aspects that are more supportive of economic growth, development, boosting the attraction of our economy for investment and creating job opportunities for citizens through concentration on the sectors of human development, the infrastructure and social services.

'To implement this goal, the budget includes new programs, projects and additional phases of a number of projects which previously had been approved; the total cost of these exceeds 260 billion riyals compared to 225 billion riyals of the current fiscal year budget.

'This budget represents a continuation of our course of giving priority to human development and boosting their competency.

Therefore, more than 137 billion riyals have been earmarked for the sectors of general and higher education and training of man power.

The programs of this sector cover the continuation of work to implement our project to develop education and approval of building 1200 new boys and girls’ schools.

The budget also includes appropriations for the four new universities in Dammam, Kharj, Majma'ah and Shaqra; the completion of university cities in a number of existing universities and the establishment of new polytechnic colleges and vocational institutes.

'In the sector of health and social development, more than 61 billion riyals have been allocated to the continuation of work to raise the level of medical services and support for social programs. The budget includes new health projects to complete the establishment and equipment of primary health care centers all over the kingdom and for the establishment of 8 new hospitals, and for the renewal and development of the infrastructure of 19 existing hospitals.

In the social services field, the budget contains new projects for building sports clubs and cities; homes for social and rehabilitation care, and for monitoring and necessary appropriations for supporting the social security programs.

'22 billion riyals have been earmarked for the sectors of municipal services, including new municipal projects and additions to some existing projects.

'The appropriations for the sector of transport and telecommunications amounts to about 24 billion riyals for new projects and additions to previously approved projects.

'Appropriations for the sectors of water, industry, agriculture and other basic utilities has totaled about 46 billion riyals for new projects to supply drinking water and sanitary drainage services; the infrastructure and utilities in the two industrial cities of Jubail and Yanbu and projects to lay the infrastructure for mineral industries in Ras Alzoor.

'The development of judicial bodies and the implementation of the national plan for sciences and technology and the national plan for telecommunications and information technology will continue, Allah willing. The specialized government development funds and banks will continue providing loans in the fields of industry, agriculture and small and medium projects.

'As its predecessors, this budget stresses the balanced view among sectors and balanced development among regions. It gives importance to the future view of the balance of the government finance and its stability to help boost comprehensive development in our beloved homeland.

'In conclusion, we stress the precise and sincere implementation of budget's programs and projects. The ministers and heads of government agencies must closely follow up the implementation of the budget's programs and projects without any tardiness or negligence and should always be up to the responsibility and trust they have before Allah and before us. The monitoring agencies should carry out their roles fully and submit reports to us without delay.'

Then, the Custodian of the Two Holy Mosques directed the ministers to work hard and sincerely. The king said, 'Thank Allah for this budget which has welfare and boon. You should complement it with hard work, sincerity and speed. Anything that impedes it should not be tolerated because this is what I hear from people and sense it myself. Some projects have not yet materialized. They are lost. But, I hope you inform me of any person's shortcomings, including the Minister of Finance.

There is no shortage at all. If it happens, the blame will be on the Minister alone.

'Please, this is a service to your religion, homeland and the future of your security. I wish success to you, to this religion and to this homeland. Thank you.'

The Minister of Culture and Information said that in line with directives of the king, the Minister of Finance presented a briefing on the new budget and touched on the world economic situation and developments as well as developments of the national economy, results of fiscal year 1429-1430 H. and the main features of the new budget.

The main highlights:

According to the Central Department of Statistics and Information, GDP is estimated in 2009 to be SR 1,384.4 ($369.2) billion in current prices, reflecting a contraction of about 22.0 per cent compared to 2008. Non-oil GDP is estimated to grow by 5.5 percent. This growth is mainly attributed to the government stimulus program. The private sector is estimated to have grown by 2.85 percent in current prices in 2009.

In real terms, overall GDP is estimated to grow by 0.15 percent.

However, non-oil GDP is estimated to grow by 3.0 percent, with government sector growing by 4.00 per cent and private sector by 2.54 per cent in 2009. All components of the GDP recorded positive growth in 2009, except the oil sector.

In particular, the industrial sector is estimated to grow by 2.20 percent; construction sector by 3.90 per cent; electricity, gas and water sector by 3.35 per cent; transport and communication sector by 6.00 percent; wholesale, retail, restaurants and hotels by 2.00 percent; and finance, insurance and real estate by 1.80 percent in constant prices.

The minister said that Inflation, as measured by the cost of living index, is estimated at 4.40 percent in 2009, while the non-oil GDF deflator showed an increase of 2.40 percent, according to estimates by the Central Department of Statistics and Information.

He stated that according to SAMA preliminary data, trade balance is estimated to record a surplus of SR 390.3 ($104.1) billion in 2009, a decline of 50.9 per cent compared to last year, as a result of the decline in oil price and quantity as well as non-oil exports.

Current account is estimated to record a surplus amounting to SR 76.7 ($20.5) billion in 2009 compared to SR 496.2 ($132.3) billion in 2008, a decline of 84.5 percent.

The Minister of Finance said the Custodian of the Two Holy Mosques directed that the budget include new appropriations and projects more than what have initially been approved in the current budget. Emphasis has been placed on development projects leading to increased job opportunities.

The fiscal appropriations are distributed in a way that promotes the sectors of education, health, security, social and municipal services, water, sanitary drainage, roads, electronic dealings and scientific research support.

In his statement, the Minister of Culture and Information said that the King thanked Allah for the blessings this country enjoys.

The King urged all to thank Allah for these blessings and directed all officials to fear Allah all the time and everywhere and to work for the service of their religion and homeland, thereby fulfilling the obligations of the trust they bear.