Fiscal Balance Program

The Fiscal Balance Program is a national programme launched on 23 Rabi' al-Awwal 1438 AH, corresponding to 22 December 2016, and one of the programmes for achieving Saudi Vision 2030. [1]

The programme is one of the programmes of strategic importance for the Government for achieving the Vision approved by the Council of Ministers, under the chairmanship of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud, on 18 Rajab 1437 AH, corresponding to 25 April 2016, and identified by the Council of Economic and Development Affairs. [1] Following the approval of 13 programmes for achieving the Vision, the Fiscal Balance Program is one of them. [5]

The programme was launched under the name the Fiscal Balance Program in 2016 to bring together a set of initiatives concerned with financial reforms that ensure long-term financial and economic sustainability. [7]

The programme was approved by a decision of the Council of Ministers and rested on reviewing existing projects, the mechanism of their approval and their economic impact, including raising the efficiency of government support and directing it to the entitled groups. [2] The Kingdom's budget for 2017 revealed a high level of transparency that disclosed all the components of the budget and showed tangible success in controlling public finances and reducing the budget deficit for the year below the initial estimates. [2]

Within the same framework, Royal Decree No. (M/29) was issued on 23/3/1438 AH concerning the state's general budget for the fiscal year 1438/1439 AH, setting the expenditure ceiling at 890 billion riyals and the expected revenues at 692 billion riyals. [3]

The total public debt had reached 342.4 billion riyals up to 30 November 2016, after the issuance of domestic and international debt instruments amounting to 200.1 billion riyals during 2016. [4] The launch of the programme came within efforts to control public finances, amid a deficit of 367 billion riyals (98 billion dollars) in 2015. [2]

The launch of the programme marked a turning point for enabling medium-term financial planning, aimed at sustaining and stabilising public finances while preserving economic growth rates. [5]

The programme rests on four main components: diversifying the state's revenue sources, raising the efficiency of government spending, stimulating the private sector and directing support to its entitled citizens. [5]

The programme included a set of approved financial reforms, including the Citizen Account, stimulus packages for the private sector, the application of the expatriate levy, the raising of value-added tax, the correction of energy prices and an increase in customs duties on some goods related to harmful products. [6]

The programme contributed to establishing a number of national entities, including the Expenditure Efficiency and Government Projects Authority, which, in cooperation with government bodies, contributed to raising spending efficiency and achieved an annual financial impact rate of nearly 114 billion riyals, with a total financial impact of 687 billion riyals from 2018 to 2023, alongside the National Debt Management Center, which played a pivotal role in accessing debt markets and managing the government debt portfolio, and the Non-Oil Revenue Development Center, which contributed to diversifying, developing and sustaining revenues and to reducing reliance on oil revenues. [7]

The programme contributed to controlling the deficit ratios to gross domestic product, which fell from 15.8% in 2015 to 4.5% in 2019. [5]

The average annual variance of the actual performance of total expenditure from its budget estimates declined from an average of 16% during the period 2014–2016 to an average of 4% during the period 2017–2019. [5] The Kingdom's ranking advanced 18 places in the budget transparency index in 2019 compared with the previous survey issued in 2017. [5]

In the field of revenue diversification, the programme contributed to increasing non-oil revenues from 186 billion riyals in 2016 to 458 billion riyals in 2023, a growth rate of nearly 146%, and their coverage ratio of total spending rose from 22% to 35%. [7]

The budget deficit is expected to decline from 293.900 billion riyals in 2020, which represented 12% of gross domestic product, to 13 billion riyals in 2023, or about 0.4% of gross domestic product, a decrease of nearly 96%. [6]

Q: What is the Fiscal Balance Program? A: It is a national programme launched on 22 December 2016, one of the programmes for achieving Saudi Vision 2030, working to enhance the sustainability of public finances. [1]

Q: When was the programme launched and under what name? A: It was launched on 23 Rabi' al-Awwal 1438 AH, corresponding to 22 December 2016, under the name the Fiscal Balance Program, and it later became known as the Fiscal Sustainability Program. [1][7]

Q: What are the programme's objectives and components? A: Sustaining and stabilising public finances while preserving economic growth rates, through diversifying revenue sources, raising the efficiency of government spending, stimulating the private sector and directing support to its entitled recipients. [5]

Q: What are the most prominent achievements of the programme? A: The decline of the deficit ratio to gross domestic product from 15.8% in 2015 to 4.5% in 2019, and the increase of non-oil revenues from 186 billion riyals in 2016 to 458 billion riyals in 2023. [5][7]

Q: What are the entities the programme contributed to establishing? A: The Expenditure Efficiency and Government Projects Authority, the National Debt Management Center and the Non-Oil Revenue Development Center. [7]

The Fiscal Balance Program was one of the programmes for achieving Saudi Vision 2030 that drove the control of public finances, the diversification of revenue sources and the raising of spending efficiency, and it later became known as the Fiscal Sustainability Program after completing its executive plan as the first Vision-achieving programme to do so. [5][7] Among the related topics on the platform are Saudi Vision 2030, the National Transformation Program, the Financial Sector Development Program, the Public Investment Fund and the Saudi Central Bank.