Saudi Arabia’s budget deficit is on track to be half what it was last year, yet the country appears to be as dependent on oil as ever.
The budget deficit fell to the equivalent of $19 billion in the first six months of the year, half the corresponding figure for the first six months of 2016 and less than half the government’s budgeted full-year deficit of $53 billion, according to the Ministry of Finance.
Yet the improvement in the country’s fiscal position “almost entirely reflects a sharp increase in oil revenues from higher oil prices, illustrating Saudi Arabia’s oil dependence,” said ratings agency Moody’s.
The government has not succeeded in boosting its takings from the non-oil economy. Non-oil revenues declined 12% in the first six months of the year compared with the same period in 2016.
The fall in non-oil revenues came despite a rise in income tax revenue, said the figures.
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