Stimulus efforts widen Saudi deficit

Riyadh: Saudi Arabia expects its fiscal deficit to rise to 70 billion riyals (Dh68 billion) in 2010 from a planned 45 billion riyals this year as it raises investment despite a fall in revenues, the finance ministry said on Monday.

The kingdom, Opec's top oil exporter and a member of the Group of 20 leading economies, forecasts expenditures of 540 billion riyals for 2010, down from an expected 550 billion riyals this year.

Riyadh expects revenues to fall from 505 billion riyals to 470 billion this year. But it also plans to increase spending on investment projects by 16 per cent to 260 billion riyals.

"The national budget will continue to focus on enhancing economic development and improving investment enviroment that supports strong and balanced economic growth," the finance ministry said in a statement.

Nominal GDP is estimated to be 1.384 trillion riyals in 2009, down 22 per cent from 2008, the ministry said. In real terms, overall GDP is expected to rise by 0.15 per cent in 2009.

The non-oil GDP is gaining 3 per cent, with the government sector rising by 4 per cent, while the private sector gains 2.54 per cent in real terms.

Inflation is estimated to be 4.4 per cent in 2009.