A Spending Spree as a Means of Fulfilling the Saudi Vision
MIN READJan 4, 2018 | 08:00 GMT
Saudi Finance Minister Mohammed al-Jadaan (R), Minister of Economy and Planning Mohammed al-Tuwaijri (C) and Saudi Arabian Monetary Agency (SAMA) Governor Ahmed al- Khulaifi (L) take part in a press conference during which officials announced the state budget for 2018, in Riyadh, on December 19, 2017.
(FAYEZ NURELDINE/AFP/Getty Images)
Saudi Arabia laid out the biggest spending plan in the kingdom's history in absolute terms when the government published its 2018 budget in late December. After two years of austerity measures and budget deficits following the oil price dive in 2014, the sizable amount of slated expenditures for this year could seem counterintuitive. Yet the amount of planned spending fits with the current turning point for the Saudi economy, which ranks as the world's 20th largest in terms of gross domestic product, and meshes with plans laid out by Crown Prince Mohammed bin Salman for the country's long-term economic future. But the budget also extends state support to Saudi citizens even though weaning its citizenry from their reliance on subsidies is a long-term reform goal. Moreover, to pay for its spending plan, the government is counting on untested new revenue sources, including newly instated taxes....