RIYAD: Saudi Arabia’s plan to erase its budget deficit by 2023 relies in part on a scenario that would see oil revenue surge by about 80 percent, according to people with knowledge of the matter.
Under a six year fiscal program, officials predict rising oil prices and output will push income from oil sales to 801.4 billion riyals ($214 billion) from 440 billion riyals this year, the people said on condition of anonymity because they aren’t authorized to share the data publicly. It assumes the price of oil will reach $75 a barrel. Non-oil revenue, excluding income from the Public Investment Fund, would increase 32 percent to 337 billion riyals, they said.
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The forecasts show how essential crude prices are to repair public finances even as Crown Prince Mohammed bin Salman tries to prepare the kingdom for the post-oil era. The kingdom has led a drive among major non-OPEC members to stabilize oil markets through production cuts that have helped Brent crude prices gained 17 percent this year to $66.87 a barrel on Wednesday. The oil revenue forecast “looks challenging given the development in the shale industry,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
