Saudi Arabia raised its fiscal surplus estimates for this year and 2023, reflecting the kingdom's confidence in its economic reform programme that has been strengthened by higher oil prices.
The kingdom's approved 1.114 trillion riyals ($296 billion) budget for 2023 now forecasts a surplus of 16 billion riyals, equal to 0.4 per cent of gross domestic product. This compares with a previous surplus estimate of 9 billion riyals announced in a pre-budget statement three months ago.
Total revenue is projected to reach 1.13 trillion riyals, compared with an estimate of 1.12 trillion riyals. The government maintained its earlier expenditure guidance estimate of 1.11 trillion riyals in 2023.
Government reserves are expected to reach about 399 billion riyals by the end of 2023.
Saudi Arabia's preliminary estimates for 2023 indicate a real GDP growth rate of 3.1 per cent, with inflation projected at 2.1 per cent, said Saudi Finance Minister Mohammed Al Jadaan. The kingdom's inflation rate for this year is about 2.6 per cent.
The kingdom will continue spending on major projects and programmes related to its Vision 2030 economic transformation plan that seeks to diversify the economy and reduce its reliance on hydrocarbons, Saudi Crown Prince Mohammed bin Salman said, according to a Saudi Press Agency report.
Vision 2030 aims to boost the kingdom's economy by growing its manufacturing, tourism, technology and entertainment industries and opening up capital markets to foreign investors.
For 2022, the government has slightly revised its fiscal surplus estimate to 102 billion riyals ($27 billion), equivalent to 2.6 per cent of GDP, from an earlier forecast of 90 billion riyals, after high oil prices boosted revenue, leading to the first fiscal surplus since 2013.
It now estimates 1.23 trillion riyals of revenue this year, compared with an earlier forecast of 1.22 trillion riyals. Saudi Arabia maintained its earlier spending guidance of 1.13 trillion.
The Arab world's largest economy is now expected to grow 8.5 per cent this year, Prince Mohammed said. Its expansion is among the highest in the world.
“The economic recovery, financial control initiatives and policies, and the development and efficiency of public finance management contributed to achieving a surplus in the budget, while maintaining the achievement of the main objectives of the vision, as the surplus is expected to reach about 2.6 per cent of the gross domestic product in 2022,” Prince Mohammed said.
The government will direct spending from the surplus to boost government reserves, support national funds, strengthen the kingdom's financial position and strengthen its ability to face global shocks and crises, he said.
Economic and structural reforms being put in place since the launch of the kingdom's Vision 2030 plan have helped to improve the country's financial and economic indicators, with GDP growth in the third quarter of 2022 coming in at 10.2 per cent.
“There were some limited changes for the 2023 budget from the pre-budget statement, notably with a modestly higher revenue assumption,” said Monica Malik, chief economist of Abu Dhabi Commercial Bank.
“The budget sees a modest reduction in spending, though the economic impact is expected to be limited, especially with the Public Investment Fund driving much of the investment activity. We see strong underlying economic momentum driven by the investment plans in 2023. The higher oil price environment provides space for the government to focus on maintaining fiscal suitability.”
ADCB estimates the 2023 budget could be based on an oil price of around $78 to $80 a barrel. However, the lender expects a higher oil price assumption of $95 a barrel for Brent crude in 2023. Emirates NBD assumes the budget is based on an oil price forecast of around $75 per barrel, while Al Rajhi bank assumes an oil price of $78 per barrel.
The expansion of the Saudi economy has helped reduce unemployment among citizens to 9.7 per cent in the second quarter of 2022, the lowest over the past 20 years, Prince Mohammed said. Unemployment at the end of 2021 stood at 11 per cent.
More than 2.2 million Saudi citizens work in the private sector, the highest in the kingdom's history, while the number of women in the workforce has increased to 35.6 per cent, from 17.7 per cent, he said.
The kingdom's national strategy for industry aims to develop an industrial business environment and double the value of industrial exports to 557 billion riyals while attracting 1.3 trillion riyals of investment into the sector, Prince Mohammed said.
Government debt is expected to increase to 985 billion riyals in 2022 (equivalent to 24.9 per cent of GDP), from 938 billion riyals in 2021, and then fall to 951 billion in 2023 (equivalent to 24.6 per cent of GDP).
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The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
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In the box: iPad mini, USB-C cable, 20W USB-C power adapter
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Killing of Qassem Suleimani
THE BIO
Ms Al Ameri likes the variety of her job, and the daily environmental challenges she is presented with.
Regular contact with wildlife is the most appealing part of her role at the Environment Agency Abu Dhabi.
She loves to explore new destinations and lives by her motto of being a voice in the world, and not an echo.
She is the youngest of three children, and has a brother and sister.
Her favourite book, Moby Dick by Herman Melville helped inspire her towards a career exploring the natural world.
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
The specs: 2019 Haval H6
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Engine: 2.0-litre turbocharged four-cylinder
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The specs
Engine: 3.5-litre V6
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Gully Boy
Director: Zoya Akhtar
Producer: Excel Entertainment & Tiger Baby
Cast: Ranveer Singh, Alia Bhatt, Kalki Koechlin, Siddhant Chaturvedi
Rating: 4/5 stars
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
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More from Rashmee Roshan Lall
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
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Engine: 1.6-litre 4-cyl turbo
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Transmission: eight-speed auto
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Price, base / as tested: Dh48,000
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Fuel consumption, combined: 9.1L / 100km
How it works
Each player begins with one of the great empires of history, from Julius Caesar's Rome to Ramses of Egypt, spread over Europe and the Middle East.
Round by round, the player expands their empire. The more land they have, the more money they can take from their coffers for each go.
As unruled land and soldiers are acquired, players must feed them. When a player comes up against land held by another army, they can choose to battle for supremacy.
A dice-based battle system is used and players can get the edge on their enemy with by deploying a renowned hero on the battlefield.
Players that lose battles and land will find their coffers dwindle and troops go hungry. The end goal? Global domination of course.
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Killing of Qassem Suleimani
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