The Kingdom’s budget turned to a surplus of $1.78 billion in Q3 of this year CAIRO: Saudi Arabia reported its first quarterly budget surplus since the first quarter of 2019 as oil prices are trading at multiyear high and the government cut down on its social spending and rationalized expenditures. The Kingdom’s budget turned to a surplus of SR6.68 billion ($1.78 billion) in the third quarter of this year, up from a deficit of SR4.61 billion in the previous quarter, and a deficit of SR41 billion in the third quarter of 2020, the Saudi Ministry of Finance revealed in its latest quarterly report. Oil revenues went up by 60 percent in the three months ending Sept. from a year ago reaching SR148 billion, according to the ministry’s report. Social spending fell down by 41 percent over the same period, while subsidies fell down by almost half, the data showed. “The surplus occurred despite a noticeable rise in financing cost which rose by 20 percent, which is in line with the larger international and domestic debt the Kingdom is accumulating,” Mohamed Ramady, a London-based independent economist, told Arab News. “The surplus was a result of a combination of rationalized spending and higher oil prices, and this is expected in the next quarter,” he added. The International Monetary Fund expects the Saudi economy to grow by 2.8 percent in 2021 — higher than forecasts by other global and local institutions. In its latest regional economic outlook, the international organization said that oil exporters such as Saudi Arabia are expected to expand their production after August 2021. In addition, strong vaccination campaigns and higher oil prices are projected to boost the non-oil sector of the Kingdom’s economy, prompting an expansion in economic activity. The Saudi Ministry of Finance expects the Saudi economy to grow by 2.4 percent in 2021, in line with the World Bank’s predictions. Capital Economics and OECD also had similar forecasts for 2021. As for the 2022 outlook, Capital Economics had the most positive forecast for the Saudi economy, saying it would jump by 7.3 percent. The Ministry of Finance posted its projection for 2022 growth at 4.8 percent. The IMF and OECD had the same expectation as well.