The Cabinet today approved the state budget for fiscal year 1431/1432 H (FY 2010). In a statement on the budget today, Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz said that the SR 540 billion ($144 billion) budget reflects an increase of 14% over FY 1430/1431 H (FY 2009) and takes into consideration the requirements of the national economy in light of the global economic circumstances, which has lead to a drop in world oil demand and oil prices. In that context therefore, King Abdullah said, the Kingdom will channel its financial resources “to areas which require more spending in order to boost economic growth and development, make our economy more attractive for investment, and create more jobs for Saudi citizens.”
The budget includes SR 260 billion ($70 billion) to support economic growth and development, job creation, and social services.
The 2010 budget addresses the national priority in human development, King Abdullah said by allocating more than SR 137 billion ($36.53 billion) or 25.4%, for education and training, including the construction of 1,200 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.”
The budget has allocated SR 61 billion ($12.3 billion) for health and social development; SR 22 billion ($5.9 billion) for municipal services, including new municipal projects and additions to existing projects; SR 24 billion ($6.4 billion) for transport and telecommunications; and SR 46 billion ($12.27 billion) for water, industry, agriculture and utilities sectors.
King Abdullah said the government will continue its efforts to develop judicial bodies and implement a national plan for science and technology; government lending organizations will continue to provide loans for agricultural and small and medium industrial projects.
According to the Central Department of Statistics and Information, GDP is estimated in 2009 to be SR 1,384.4 billion ($369.2 billion) in current prices, reflecting a contraction of about 22.0% compared to 2008. Non-oil GDP is estimated to grow by 5.5%. This growth is mainly attributed to the government stimulus program. The private sector is estimated to have grown by 2.85% in current prices in 2009.
In real terms, overall GDP is estimated to grow by 0.15%. However, non-oil GDP is estimated to grow by 3%, with government sector growing by 4% and private sector by 2.54% 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 2.2%; construction sector by 3.9%; electricity, gas and water sector by 3.35%; transport and communication sector by 6%; wholesale, retail, restaurants and hotels by 2%; and finance, insurance and real estate by 1.8% in constant prices.
The minister said that inflation, as measured by the cost of living index, is estimated at 4.4% in 2009, while the non-oil GDP deflator showed an increase of 2.4%, 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 billion ($104.1 billion) in 2009, a decline of 50.9% 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 billion ($20.5 billion) in 2009 compared to SR 496.2 billion ($132.3 billion) in 2008, a decline of 84.5%.
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.
Royal decrees on 2010 budget
Ministry of Finance Report on FY2009 and FY2010 budgets