1999 Public Statement

State Budget for FY 2000
The Ministry of Finance and National Economy today issued the following statement (plus the text of the Royal Decrees) for the FY 2000 State Budget:

On the occasion of the adoption of the State Budget for the fiscal year 2000 [1420/1421 H], the Ministry of Finance and National Economy is pleased to highlight the main features of the national economy and the budget.

Recent economic developments in 1999

Gross Domestic Product (GDP):
The GDP is estimated to have grown by 8.44 percent in current prices in 1999 mainly as a result of the recovery of oil prices specially in the second half of the year, reaching SR 521.3 billion [U.S. $ 139.01 billion] compared to SR 480.8 [U.S. $ 128.21 billion] in 1998. Private sector GDP is estimated to have grown by 2.4 percent in current prices and by 2.0 percent in constant prices with a share of 38 percent of the total GDP in current prices and 48 percent in constant prices.

The non-oil industrial sector is estimated to have grown by 6.3 percent and construction by 2.1 percent in current prices. The utilities sector (electricity, gas and water) is estimated to have grown by 3.9 percent, and the transport and communications sector by 2.4 percent in current prices. This indicates continued expansion of the private sector, an increase in its efficiency, and less dependence on government spending. The non-oil industrial sector in particular has been witnessing robust growth for several years.


General price level:
Inflation, as measured by the cost of living index, is estimated to have dropped by 1.2 percent in 1999, while the non-oil GDP deflator is estimated at 0.98 percent.


Balance of payments:
The deficit in the current account is estimated to have dropped by 70.3 percent in 1999, amounting to SR 14.6 billion [U.S. $ 3.89 billion] compared to SR 49.2 billion [U.S. $ 13.2 billion] in 1998; this is the result of the increase in oil prices, government policies to rationalize spending, and the decline in private transfers. Non-oil exports are estimated to have grown by 1.6 percent in 1999 totaling SR 23.8 billion [U.S. $ 6.35 billion] due mainly to improvement in petrochemical prices. Imports are estimated to have dropped by 0.2 percent amounting to SR 102.8 billion [U.S. $ 27.41 billion].


Monetary trends:
The government's financial and monetary policies continue to be directed by the objective of maintaining stable prices and a stable exchange rate. The broad money supply during the first ten months of 1999 grew by 0.9 percent to reach SR 284.7 billion [U.S. $ 75.92 billion]. The growth in money supply is attributable to the increase in oil prices and the decline in private sector balance of payment deficit. This modest growth coincided with a decline in the consumer price index.


Banking sector:
Banks are continuing to strengthen their financial positions; their capital and reserves increased by 4.7 percent in the first ten months of fiscal year 1999, reaching SR 42.1 billion [U.S. $ 11.23 billion] by the end of October 1999. The average risk-weighted capital to assets ratio is 21.1 percent, which is about 2.5 times the international standard.


Stock market:
The stock market improved considerably during 1999 as compared to 1998. The NCFEI share index stood at 1,974 as of December 16, 1999, compared to 1,413 at the beginning of 1999. This represents an increase of 39.7 percent.


Consistent with the government's policy towards the private sector, the cabinet approved the final stage of privatizing the power sector, and initiated the privatization of the utility services currently provided by the Royal Commission for Jubail and Yanbu. The ministerial committee for privatization is reviewing other proposals.

Current balance of accounts for fiscal year 1999 [1419/1420]:

 revenues  SR 147 billion  U.S. $ 39.20 billion
 expenditures  SR 181 billion  U.S. $ 48.27 billion
 deficit  SR   34 billion  U.S. $   9.07 billion

Salient Features of the State Budget for the year 2000 [1420/1421]

 total revenues projected for FY2000 SR 157 billion   U.S. $ 41.87 billion
 government expenditure budgeted SR 185 billion  U.S. $ 49.33 billion
 deficit projected for FY2000 SR   28 billion  U.S. $   7.47 billion

New programs and projects amount to: SR 8 billion [U.S. $ 2.13 b.]

The main appropriations for the development and public service sectors for the fiscal year 2000 [1420/1421 H] are as follows:

SR 49.4 billion [U.S. $ 13.17 b.] for education including vocational training
SR 19.9 billion [U.S. $   5.31 b.] for health services and social development
SR   7.1 billion [U.S. $   1.89 b.] for municipality services and water authorities
SR   5.6 billion [U.S. $   1.49 b.] for transportation and communications
SR   9.1 billion [U.S. $   2.43 b.] for infrastructure and industry
SR   5.5 billion [U.S. $   1.47 b.] for social transfers, subsidies and programs

Specialized development institutions
In addition, the specialized development institutions (Industrial Development Fund, Agricultural Bank, Real Estate Development Fund, Credit Bank, and Public Investment Fund) will continue to provide loans to development projects and services in the areas of industry, agriculture, and real estate. The loans to be provided by these institutions in the fiscal year 2000 are projected at over SR 6 billion [U.S. $ 1.6 billion].




Three royal decrees were issued December 20, 1999 [12/09/1420 H] promulgating the State Budget for the fiscal year 2000 [1420/1421 H]. They cover the revenue and expenditure of public institutions, and fix January 1, 2000 as the date of commencement of the State Budget.

The first royal decree approved allocations in the budget as follows:

The second royal decree approves the budget of municipalities. water departments:

The third royal decree approves the budgets of bodies included in the State Budget:

The revenues and expenditures of these organizations are as follows: