HIGHLIGHTS Revenue: SR410 billion ($109.3 billion). Expenditure: SR475 billion ($126.7 billion). Deficit: SR65 billion ($17.3 billion). Total new capital budget (new projects and increased appropriations for existing projects): SR225 billion ($60 billion) up 36 percent from last year. Despite oil price fall......the 2009 budget will continue to focus on: optimizing use of available resources giving priority to projects that ensure sustainable and balanced development as well as more employment opportunities and job creation. infrastructure and social services, especially education, health, social affairs, municipal services, water and sewage, and roads. projects related to science and technology and e-government capital expenditures to boost economic activities and enhance the prospects of economic growth. KHOZAIM OASIS, Riyadh – King Abdullah, Custodian of the Two Holy Mosques, unveiled a SR475 billion deficit budget Monday that is SR65 billion more than last year's state budget. It was the biggest budget ever, boosted by a record surplus of SR510 billion in 2008 and signaling that the Kingdom would push ahead with development plans despite the global economic crisis which has led to a sharp fall in oil prices. King Abdullah, in his address on the occasion, called upon state officials to monitor and implement all the projects envisioned in the 2009 budget as per the set timetable so as to “secure citizens' needs and push ahead the wheel of development.” Expenditure in 2009 was projected at SR475 billlion – lower than the 2008 spending of SR510 billion – against revenue estimated at SR410 billion. Economists downplayed the projected fall in spending from the 2008 target, saying that Riyadh always spends more than it budgets, including this year when actual payouts were far higher than the budgeted SR410 billion. “I think it is clearly sending a message that it's going to be an expansionary budget at a time when global economic conditions look very pale,” said John Sfakianakis, chief economist at the Saudi British Bank. Sfakianakis said he estimates the Kingdom has set the budget on an average $43 per barrel for the US benchmark West Texas Intermediate crude in 2009. Paul Gamble, head of research at Jadwa Investment in Riyadh, said the budget appears to be aimed at Saudis worried over the fall in oil prices and the impact on the Saudi economy of the global financial crisis. “For the guy in the street, this will really assure him that the government hasn't been affected by the collapse in oil prices,” he said. Jadwa Investment said last week that the government's net foreign assets, put at $433 billion at the end of September, “gives Saudi Arabia an advantage over most other countries in alleviating the impact of the extreme financing pressures.” “They mean it can push ahead with strategic projects such as key infrastructure, oil, power and water, and support the private sector where necessary.” The budget allocated SR225 billion for new projects – an increase of 36 percent compared to last year. Education One quarter (SR122.1 billion) of the budget went to the education sector, covering general education, higher education, manpower training, and including science, technology, scientific research and foreign scholarships. To provide a suitable environment for education, new projects have been approved, the King said, adding that admission capacities of schools, universities and specialist colleges would be increased. The priority is for completing the projects for Princess Noura Bint Abdulrahman University and King Abdul Aziz University for Science and Health and its branches, he added. Health, Social Development Health and Social Development were allocated about SR52.3 billion, primarily to increase admission capacity of hospitals, upgrade primary health care, support anti-poverty programs and promote youth and sports activities. Water, Municipality, Agriculture, Industry, Infrastructure State spending on Water, Municipal, Agricultural and Industrial Services and Basic Infrastructure was earmarked at SR49 billion. The King said the amount was for new and ongoing municipal projects and for strengthening water resources, sanitary drainage services, environment protection and food and drug safety. Transportation, Telecom The Transportation and Telecommunication sector got SR19 billion – for road completion and maintenance besides new seaport and airport projects. __
