SAUDI ARABIAN MARKET
Saudi Arabia Macroeconomic Developments
• Saudi Arabia’s government revenues were up 4 percent in Q3 compared to the same period last year as increased non-oil revenue derived from higher value-added tax (VAT) compensated for lower oil revenues. Oil revenue declined 30 percent YoY in Q3, totaling SAR93 billion ($25 billion), while taxes on goods and services increased 37 percent to reach SAR52 billion ($14 billion). Non-oil revenues were up 63 percent to reach SAR123 billion ($33 billion).
• Saudi Arabia’s government expenditures increased 7 percent YoY in Q3, driven by a 215 percent increase in subsidies stemming from government actions to stabilize business operations and employment levels following pandemic-related lockdowns. ‘Economic Resources’, which includes desalination infrastructure, environmental and agricultural projects, and tourism development declined 38 percent YoY.
• Saudi Arabia posted a budget deficit of SAR41 billion ($11 billion) in Q3, down from SAR109 billion ($29 billion) recorded in Q2. The Kingdom’s debt issuances in Q3 totaled SAR43 billion ($12 billion) with domestic sukuk issuances accounting for 97 percent of financing. The government also drew SAR1.3 billion ($355 million) from its reserves in Q3. During the first nine months of 2020, the Saudi government issued SAR187 billion ($50 billion) in debt of which 45 percent came from domestic borrowing, 24 percent from foreign borrowing, and 27 percent from government reserves.