Fitch Ratings says an expansionary 2013 budget based on a conservative oil price will support another year of healthy economic growth for Saudi Arabia and a further strengthening of the sovereign's net creditor position. However, overall growth will slow due to a decline in oil production that was already evident in recent months.
The FY13 (31 December 2012 to 30 December 2013) budget unveiled on December 29 projects record spending of USD219bn (34% of GDP), up by almost 20% on the 2012 budget. Budgeted capital spending is 28% higher than in 2012, though the government has struggled to achieve its capital spending targets in recent years. Education and healthcare remain the focus of spending, accounting for 37% of the total. Defence and security tends to be the largest single item, constituting around one-third, but is not disclosed in the budget.
TEXT-Fitch:Expansionary budget to support growth in Saudi Arabia | Reuters
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