On the occasion of the adoption of the State Budget for the fiscal year 2002 [1422/1423 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 2001
Gross Domestic Product (GDP):
The GDP is estimated to have declined 1.8 percent in current prices to SR 668 billion [US $ 178.13 billion) and grown by 2.2 percent in constant prices to SR 164 billion [US $ 164 billion] mainly due to a decline in the oil sector GDP during the fourth quarter. Private sector GDP is estimated to have grown 6/0 percent in current prices and by 5.9 percent in real terms.
The non-oil industrial sector is estimated to have grown by 9.3 percent and construction by 3.3 percent.
The communication and transport sector is estimated to have grown 9.1 percent and the utilities sector (electric, gas, and water) grew by an estimated 4.5 percent.
General Price Level :
Inflation, as measured by the cost of living index, is estimated to have declined by 0.8 percent in 2001, while the non-oil GDP deflator is estimated to have grown by 0.8 percent.
Balance of Payments:
The deficit in the current account is expected to reach SR 25 billion [US $ 68 billion], which represents 3.7 percent of the GDP. The surplus is expected to reach SR 31.3 billion [US $ 8.35 billion] in 2001, as compared to a surplus of 53.7 billion [US $ 14.32 billion] in 2000. This reflects a weakness in the world economy and its impact on the oil market. Non-oil exports are estimated to have grown by 4.3 percent in 2001 to ST 25.9 billion [US $ 6.91 billion].
Current balance of accounts for the fiscal year 2001 (1421-1422):
Revenues: SR 230 billion [US $ 61.3 billion]
Expenditures: SR 255 billion [US $ 68.0 billion]
Deficit: SR 25 billion [US $ 6.67 billion]
Salient Features of the State Budget for the year 2002 [1422-1423]
• Total revenues FY 2002 projected at : SR 157 billion [US $ 41.87 billion]
• Gov’t expenditures FY2002 budgeted at: SR 202 billion [US $ 53.87 billion]
• Deficit FY2002 projected at : SR 45 billion [US $ 12.00 billion]
• New programs and projects amount to: SR 28 billion [US $ 7.47 billion]
The main appropriations for the development and public service sectors for the fiscal year 2002 [1422-23 H] are as follows:
• SR 54.3 billion [US $ 144.80 billion] for education including technical and vocational training
• SR 22.8 billion [US $ 6.08 billion] for health services and social development
• SR 9.5 billion [US $ 2.53 billion] for municipality services and water authorities
• SR 6.5 billion [US $ 1.73 billion] for transportation and communication
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 be active in providing credits to projects and services in the area of industry, agriculture, and real estate. These credits are projected to reach SR 6.2 billion [US $ 1.65 billion] in 2002. Also, in order to meet the increasing demand for housing loans by citizens, the capital of the real estate development fund will be increased by SR 2 billion [US $ 53.3 million] in 2002.
STATE BUDGET FOR FY 2002
December 8, 2001
Two royal decrees were issued December 8, 2001 (08/12/1422 H) promulgating the State Budget for the FY 2002 (1422-1423H).
They cover the revenue and expenditure of public institutions, and fix January 1, 2002 as the date of commencement of the State Budget.
The first royal decree approved allocation in the budget as follows:
1) Revenues are estimated at SR 157 billion [US $ 41.87 billion] and expenditures at SR 202 billion [US $ 53.89 billion].
2) Revenues to be collected are paid wholly to the Saudi Arabian Monetary Agency (SAMA) or its branches in the account of the Ministry of Finance and National Economy.
3) Any surplus in revenues should be set aside for repaying the public debt.
4) The Ministry of Finance and National Economy is authorized to borrow to cover the difference between the expenditures and revenues.
5) The expenditure is to be spent according to the budget and its instructions.
6) a. Transfer among appropriations' sections, subsections and articles should be according to a joint report by the concerned minister or the head of the department which has an independent budget and the minister of finance and national economy.
b. Transfer between article one and two should be decided by the concerned minister and the head of the department which has an independent budget on condition that the transfer should not exceed half of the original appropriations approved in the budget.
7) It is not permitted to use appropriations for other purposes except the purposes for which they are designed. It is not permitted to issue an order of obligation or disbursement in a way exceeding the appropriations or being obliged to any disbursement which has no appropriations in the budget.
8) It is permissible to issue a decision or conclude a contract resulting in an obligation against an upcoming fiscal year, with the exception of the following:
a) Ongoing or periodic implementation contacts such as rental contacts, services, supply of medical appliances and advisory services contacts the allocation for which are customarily made each year.
b) Supply contracts, the costs of which are allocated in chapter two of the budget. These are the contracts with periods over one year, with annual values within the limits of the budget allocations of the first fiscal year being used as a standard for defining the value of the contract.
c) Indivisible project contracts provided that commitment shall be made within the framework of costs approved for each project.
9) The concerned control departments shall follow up implementation of the contents of cabinet resolution no.52 dated 7/3/1420 H as well as article 3/h of the law for government procurements and implementation of its projects. In the event that the division of procurements and works is clearly justifiable, this shall be made in prior coordination with the Ministry of Finance and National Economy.
10) If amounts committed to during the previous fiscal years appear during the current fiscal year and exceed the approved allocation, this must be submitted to the cabinet, if the excess is unjustified; otherwise, the Minister of Finance and National Economy may give authorization for the payment of such amounts from the allocations of the current fiscal year.
11) It is absolutely not permitted to appoint or promote employees on jobs other than those approved in the budget and according to the conditions and provisions set out in the laws and rules in force.
12) Except for the appointment of ministers, it is not permitted to create new jobs or job-grades during fiscal year 2002 [1422/1423] other than those approved in the budget and according to the temporary job regulations, nor is it permitted to modify the grades approved in the budget. However, the grades may be reduced by the Minister of Civil Service based on a recommendation from a committee composed of representatives from the Ministry of Finance and National Economy, the Minister of Civil Service, and the concerned party.
13) Administrative organizations and structures of each body are approved according to what has been issued in the budget. Job titles can be modified according to job classification requirements as per a resolution from the Minister of Civil Service in line with a recommendation from a committee formed from representatives of the Ministry of Finance and National Economy, the Ministry of Civil Service, and the concerned party.
14) The Minister of Finance and National Economy shall issue the instructions necessary for implementation of the budget according to the rules and regulations mentioned in the decree.
15) The Deputy Prime Minister and all the cabinet ministers shall carry out the decree according to their respective fields of specialization.
Another royal decree approves the budget of bodies included in the State Budget:
The revenues and expenditures of these organizations are as follows:
1. Ports General Authority: SR 464,264,000 [US $ 123,803,733.3] for both revenues and expenditures.
2. Saudi Arabian Airlines: SR 10,966,000,000 [US $ 2,924,266,666.67] for both revenues and expenditures.
3. General Authority of Grain Silos and Flourmills: SR 980,000,000 [US $ 261,333,333.33] for revenues SR 455,666,000 [US $ 121,510,933.33] for expenditures.
4. General Authority of Water Desalination: SR 2,233,788,000 [US 595,676,800]
5. Rail Ways General Authority: SR 303,404,000 [US $ 80,907,733.33] for both revenues and expenditures for both revenues and expenditures.
6. General Authority of Petroleum and Minerals: SR 2,426,000 [US $ 5,980,266.67] for both revenues and expenditures.
7. Royal Commission of Jubail Yanbou: SR 2,172,795,000 [US $ 579,412,000] for both revenues and expenditures.
8. Saudi Arabian Standards Authority: SR 81,107,000 [US $ 21,628,533.33] for both revenues and expenditures.
9. Investment General Authority: SR 63,813,000 [US $ 17,016,800] for both revenues and expenditures.
10. King Saud University: SR 2,298,133,000 [US $ 612,835,466.67] for both revenues and expenditures.
11. King Abdulaziz University: SR 1,456,305,000 [US $ 388,348,000] for both revenues and expenditures.
12. King Fahd University for Petroleum and Minerals is: SR 539,892,000 [US $ 143,971,200] for both revenues and expenditures.
13. Imam Mohammad bin Saud Islamic University: SR 1,257,593,000 [US $ 335,358,133.33] for both revenues and expenditures.
14. Islamic University in Madinah: SR 280,991,000 [US 74,930,933.33] for both revenues and expenditures.
15. King Faisal University: SR 723,472,000 [US 192,925,866.67] for both revenues and expenditures.
16. Um Alqura University: SR 710,619,000 [US $ 189,498,400] for both revenues and expenditures.
17. King Khalid University: SR 407,413,000 [US $ 108,643,466.67] for both revenues and expenditures.
18. General Organization of Technical Education and Vocational Training: SR 1,508,900,000 [US $ 402,373,333.33] for both revenues and expenditures.
19. King Abdulaziz City for Sciences and Technology: SR 518,679,000 [US $ 138,314,400] for both revenues and expenditures.
20. Institute of Public Administration: SR 223,585,000 [US $ 59,622,666.67] for both revenues and expenditures.
21. Saudi Red Crescent Society: SR 249,055,000 [US $ 66,414,666.67] for both revenues and expenditures.
22. General Organization of Military Industries: SR 710,610,000 [US $ 189,496,000] for both revenues and expenditures.
23. Saudi Geological Surveying Authority: SR 120,600,000 [US $ 32,160,000] for both revenues and expenditures.
24. Tourism Higher Authority: SR 79,123,000 [US $ 21,099,466.62] for both revenues and expenditures.
25. Saudi Telecommunications Authority: SR 70,000,000 [US $ 18,666,666.67] for both revenues and expenditures.
26. Pension Retirement Fund: SR 31,652,200,000 [US $ 8,440,586,666.67] for revenues and SR 14,811,531,000 [US $ 3,949,741,600] for expenditures.
The excess amounts of revenues and expenditures shall be paid at the end of fiscal year to the Saudi Arabian Monetary Agency (SAMA)
The revenues shall be collected and expenditures spent according to the approved rules and instructions.
Provision of articles 5, 6, 7, 8, 9, 10, 11 and 12 of royal decree no. 17 dated 8/12/1422 H for approval of the general budget for fiscal year 200 [1422/1423] shall apply to the budgets of all public organizations except for Saudi Arabian Airlines the budget of which shall be prepared according to the principle of business accounting systems.
The Ministry of Finance and National Economy shall issue the instructions necessary for implementation of the budget according to the rules and regulations stipulated in this decree.
The Deputy Prime Minister and all concerned ministers shall carry out the decree according to their respective fields of specialization.