Saudi-Arabien: Haushalt 2017
Saudi Arabia: Budget 2017
The official Saudi estimates for the 2016 budget put the deficit at - Saudi
Riyal (SAR) 402bn or -16.7% of Gross Domestic Product (GDP). This is higher than
our own forecast of -SAR 325bn (-13.5% of GDP) largely due to lower than
forecast oil revenue. The government estimated oil revenues at just SAR 329bn
in 2016, lower than our estimate of SAR385bn.
With the average oil price
at USD 45/b and average oil production of 10.4mn bpd last year, the government’s
estimate implies only a 50% pass-through from crude oil produced to the budget.
In 2015, this figure was 60% and in 2010-2014 the average pass-through was 73%.
We think the initial estimate is too low, and expect the oil revenue figure to
be revised higher in due course. Consequently, we estimate an overall budget
deficit of –SAR 345bn (-14.4% GDP) in 2016.
Cash or accrual Budget?
Expenditure was lower than we had forecast at SAR 930bn, but this was still a
10.7% overspend on the SAR 840bn budget. While government spending was more
than budgeted last year, it was nevertheless nearly -5% lower than 2015. The
budget statement noted that SAR 105bn of the total SAR 930bn spending was
actually settlement of accounts from 2015 (SAR 80bn) and spending related to
infrastructure projects for which funding had already been earmarked (SAR 25bn).
The 'true' spending for the fiscal year on an accrual basis was thus just SAR
825bn according to the budget statement.
However, the budget has always
typically been reported on a cash basis, so if SAR 80bn is deducted from the
2016 expenditure figure as an accrued expense from the previous year, then it
should be added to the 2015 expenditure figure (which it hasn’t been).
Similarly, it's not clear that the funding set aside for infrastructure
investment projects in the government's reserve accounts has actually been put
through as expenditure in previous budgets (which were prepared on a cash
basis).
We think it makes sense to look at the cash budget analysis for
the time being, as these are substantial sums of money, and the transition to a
full accrual basis for the budget is only likely to be achieved by 2020.
2017 budget isn't really expansionary
The official budget statement indicates a 7.8% increase in spending from
2016, with total spending forecast at SAR 890bn. However, if we use the cash
approach, the official budget projects a -4.3% cut in spending. As is usually
the case however, we expect some overspend this year. We have conservatively
forecast government spending at SAR 950bn in 2017, 6.7% higher than the budget
and 2.1% higher than actual spending in 2016.
For the first time, the
budget statement provides a specific figure for oil revenues, SAR 480bn.
Assuming oil production averages 10.1mn bpd in 2017, the budget seems to be
based on average oil price of USD 53/b in 2017; not far off our own forecast of
USD 55/b. We forecast the budget deficit narrowing to -9.6% of GDP this year
from our estimate of -14.4% in 2016.
Defense and Education remain biggest component of budget
Military spending and education accounted for half of total budget spending
in 2016. Spending on defense was nearly 15% over the budget allocation, while
municipal services and health & social development spent less than they were
allocated.
In 2017, the military has been allocated 21.4% of the budget
with security and regional administration another 10.9%. Education will
get 22.5% of total spending, with health & social development and public
programs also taking sizeable chunks of the pie. These figures again
presumably exclude the special infrastructure projects for which funds have
already been set aside in the government's reserve accounts (from previous
years' budget surpluses).
Financing the deficit
The budget statement indicates that the deficit will again be financed through a mix of debt and drawing down of reserves. In 2016, the stock of public debt increased to SAR 316.5bn (13.1% of GDP by our estimates) from SAR 142bn (5.8% of GDP in 2015). In its budget statement, the government indicated that it would limit the stock of public debt to 30% of GDP. If we assume that about 60% of this year’s deficit is financed by borrowing (similar to 2016), then this would imply a further increase in the debt stock by SAR 155bn to around 18% of GDP.
Conclusion
Overall, we don't expect a significant boost to growth from increased spending in 2017. However, the drag on growth from last year's spending cuts is also unlikely to be repeated, if the oil price meets our forecast of USD 55/b this year. The budget statement indicated that real GDP growth slowed to 1.4% in 2016, from 3.4% in 2015 and exactly in line with our forecast. Following the 2017 budget statement, we retain our GDP growth forecast of 1.8% this year.
Saudi-Arabiens Budget 2017
Ab Seite 24 zum Thema Bildung.
Quelle: Emirates NDB, emiratesndbresearch.com, 02.01.2017