Minister of Finance and National Economy Dr. Ibrahim Al-Assaf stated yesterday that in the new budget for the fiscal year 1417-1418 (1997), revenues are estimated at SR 164 billion (U.S. $ 43.7 billion) and expenditure at SR 181 billion (U.S. $ 48.3 billion). The SR 17 billion (U.S. $ 4.5 billion) deficit will be financed through borrowing from local sources, as was the case during the previous fiscal year. He reiterated the budget’s emphasis on three main areas: Saudization of jobs, achieving economic competence in both public and private sectors, and consolidating the role of the private sector in the national economy, adding that new development projects include construction of mosques, schools, dams, roads, and health facilities for a total cost of more than SR 7.5 billion (U.S. $ 2 billion) as well as the establishment of power generation stations, costing SR 2 billion (U.S. $ 0.5 billion). The economic sector will be supported through the budgets of the various public industrial, agricultural and real estate development funds, which are expected to extend to about SR 5 billion (U.S. $ 1.3 billion).[Full report on 1997 State Budget]
Minister Al-Assaf further reported that the non-oil industrial sector attained a growth rate of 9 percent in 1996, while the utilities sector (gas, electricity and water) achieved a growth rate of 7.3 percent. The overall growth of the economy was 8.6 percent.
In an interview on Saudi television on Tuesday evening, Minister Al-Assaf expressed satisfaction at what has been achieved, and pointed to the remarkable reduction in the deficit over the past fiscal year. The deficit now stands at only SR 17 billion (U.S. $ 4.5 billion), thanks to the control and rationalization of spending on the one hand, and on the other, an increase in revenues to levels higher than anticipated. Dr. Al-Assaf predicted that the new year would witness even greater economic growth, and that the projected deficit will be covered through domestic borrowing in accordance with the directives of Custodian of the Two Holy Mosques King Fahd Bin Abdul Aziz, in order to benefit the private sector, especially the banking and financial institutions, on the one hand, and on the other, to avoid the risks entailed in foreign loans.