Saudi Arabia boasts of both non-oil and oil revenue growth as it looks to balance its budget. Photo by Fedor Selivanov/Shutterstock
RIYADH, Saudi Arabia, Dec. 22 (UPI) -- Saudi Arabia said it was making progress on economic reforms aimed at correcting a deficit, with both oil and non-oil revenue increasing in 2017.
In a document outlining its budget plans for next year, the government said its deficit shrank to below its projection from the original budget plan for this year.
An economic agenda, dubbed Vision 2030, aims to boost Saudi Arabia's non-oil revenue and relies in part on raising money through the public listing of shares in the Saudi Arabian Oil Co., known also as Saudi Aramco. Billed as the largest-ever IPO, the 2018 offering could put the value of the company at $2 trillion.
"The 2017 budget was prepared in light of developments in the local and global economy, including the estimated price of oil," the report said.
The 2017 budget plan references a global growth rate of 3.4 percent in 2017 as estimated by the International Monetary Fund. The IMF predicts oil will average just over $50 per barrel next year, against a full-year average of $43 for 2016.
Saudi Arabia helped steer a production deal between members of the Organization of Petroleum Exporting Countries and non-OPEC members like Russia that's aimed at easing the supply-side strains that dragged oil prices below $30 per barrel. Oil prices have held steady near the $50 mark since the November agreement was reached.
The government said total revenues for 2017 are expected at $184 billion, a 31 percent increase from initial projections this year. Oil revenues are estimated at $128 billion, 46 percent higher than 2016 projections. Non-oil revenues are estimated at $56 billion, about 6.5 percent higher than 2016 projections.
"The kingdom's revenues were impacted by fluctuations in the price of oil," the budget document read."The financial strategy in the medium term aims to achieve a balanced budget by 2020 by increasing non-oil revenues, benefiting from efficiency savings on expenditures and ensuring greater fiscal discipline."
OPEC economists said the Saudi economy expanded 1.4 percent year-on-year in the second quarter, with the oil sector expanding 1.6 percent and non-oil expanding 0.4 percent. Oil demand, meanwhile, has declined for eight of the last 10 months for which data are available.
Saudi Arabia told OPEC it produced more oil in November than at any point at least since 2014.