Balancing act: Saudi bets big as deficit looms
Faced with an estimated $100 billion budget deficit but committed to a vast expenditure programme, Saudi finance minister Mohammed Al-Jadaan explains how he plans to balance the books.
The Silver Spirit, a vast luxury cruise liner, pulled out of King Abdulla Port on August 27, its departure marking the first ever recreational pleasure cruise in Saudi Arabia.
Costing between SAR7,300 ($2,000) and SAR10,300 per person, three-day voyages on the vessel are part of a push by the Saudi authorities to boost domestic tourism, a key source of future revenue for the oil-dependent nation.
After months of lockdown, there are signs of recovery in Saudi’s tourism sector. Saudis are beginning to travel and hotel room occupancy rates – 30% at the time of shutdown – have risen to 90%-95% in 11 destinations across the kingdom.
The positive year-on year growth in tourism of 15% is evidence that Saudi’s economy is getting back on track, according to minister of finance Mohammed Al-Jadaan.
Lower oil receipts, the global economic slowdown and the cost of a Covid-19 support programme have all intensified pressure on Saudi’s finances, but commitment to Vision 2030 – a vast transformation programme aimed at boosting non-oil growth – is unwavering, Al-Jadaan insisted during a Euromoney Livestream broadcast on September 3.
Enormous bets are being made by the kingdom via multi-billion dollar investments in a series of so-called 'giga-projects' – NEOM, the Red Sea Project and Qiddiya.