A budget and fiscal plan closely watched by Gulf economists, given their indirect impact on neighboring economies in general, and Gulf economies in particular. As usual, we examined the figures they contained and added them as new observations to our statistical sheets, through which we derive updated ratios, forecasts, and future numerical projections. There is no doubt that such readings reflect the state’s administrative direction, and through them the “confidence level” of related forecasts can be raised.

Firmness remains clear in the relationship between expenditures estimated at the beginning of the year and actual expenditures recorded at its end. Actual expenditures in 2016 were lower than estimated expenditures by 15 billion Saudi riyals. Although this did not occur in 2017, as actual expenditures exceeded estimated expenditures by 36 billion Saudi riyals, the total overrun across those two years is estimated at 21 billion Saudi riyals. When comparing this total overrun with the lowest annual overrun recorded since 2005 — estimated at 58 billion Saudi riyals in 2006 — the two-year overrun amounts to 36% of the 2006 overrun. This raises the “confidence level” of forecasts related to the government’s firmness in bringing actual expenditures closer to estimated expenditures.

At the end of 2016, alongside the 2017 budget, we offered projections based on two regression models. The first relied on observations from the budgets of the reign of King Abdullah, may Allah have mercy on him, while the second relied on observations from the budgets of the reign of King Salman. Taking the average of the results of these two models produced a forecast closer to what later appeared in the 2017 budget figures. That forecast stated that actual expenditures for 2017 would reach 936.85 billion Saudi riyals, with a confidence level of 97%, which was higher than the announced actual expenditures by 10.9 billion Saudi riyals. Based on our new observations and the 2018 fiscal plan, which together produced a new regression model, the forecast indicates that actual expenditures for 2018 will reach 1,048.5 billion Saudi riyals, assuming estimated expenditures of 978 billion Saudi riyals and actual revenues of 783 billion Saudi riyals, with the confidence level declining to 89%.

On the other hand, the rise in the share of non-oil revenues should not be praised — particularly in this fiscal year — because it resulted from a decline in the state treasury’s share of revenues from Saudi Aramco. Although the rise in that percentage is important, it does not necessarily indicate economic improvement through diversification of income sources. A correct reading of that ratio should be linked not only to gross domestic product, but also to the extent of the increase in exports and the decline in imports. The limited change in these two measures is evident, since GDP in 2017 was estimated at 2,738 billion Saudi riyals, still below its levels in the years from 2012 to 2014.

The standardization of indicator selection in marketing government performance is also worth noting. In each of the first, second, and third quarters, the focus was clearly placed on comparing the deficit with the corresponding quarter of the previous year, because it served as a positive indicator. However, by the end of the fiscal year, this indicator was no longer mentioned, since the actual deficit of the fourth quarter was close to the combined deficit of the previous three quarters. To that extent, the credibility of the earlier quarterly comparisons is weakened. Although the actual reasons for the rise in the fourth-quarter deficit are known, accounting and statistical scrutiny consistently criticize the failure to apply stable standards, which may be read as an attempt to mislead by highlighting only the positive side.

How can public spending be assessed through results?

Productive spending adds capacity or productivity, while spending that repeats obligations expands the burden without building new income. Through the angle of sustainability, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.

How can public obligations be assessed through results?

A state’s financial strength weakens as fixed obligations expand, because the room for reform narrows even when revenues appear large. Through the angle of sustainability, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.

How does Saudi fiscal planning and budget indicators affect the Gulf?

Its effect appears in how costs, incentives, and resources are managed, and in the Gulf's ability to turn decisions into sustainable value. The direct context is a statistical reading of Saudi Arabia’s 2017 budget and 2018 fiscal plan, assessing spending discipline, revenue claims, and indicator selection.

How can fiscal sustainability be assessed through results?

Sustainability is not secured by revenue size alone; it depends on turning resources into renewable financial capacity while controlling recurring obligations. Through the angle of sustainability, the result appears not only in declared language, but in the policy’s ability to change incentives and outcomes.