The Ministry of Finance recently released both its official second quarter 2020 GDP report and preliminary budget statement for the 2021 fiscal year. Saudi Arabia’s Q2 GDP totaled SAR564 billion ($151 billion) as lockdowns and travel restrictions hampered both manufacturing and service activity. The government expects full-year 2020 GDP to fall 3.8 percent before rebounding 3.2 percent in 2021, consistent with World Bank estimates. While the budgets for 2021 and 2022 have remained in line with prior expectations, including a continued commitment to prominent Vision 2030 reform programs, the 2020 fiscal deficit is expected to reach SAR298 billion ($79.5 billion) compared to a budgeted SAR187 billion ($49.9 billion) due to lower revenues and increased spending. The global pandemic led to widespread economic restrictions and a sharp fall in oil demand that bottomed during the second quarter. Saudi Arabia lifted most business lockdowns in late June and has been gradually easing international travel restrictions.
