Saudi Arabia’s intention to cut spending in 2020 – in addition to planned spending cuts relative to what has been budgeted for 2019 – is credit positive and raises the likelihood of achieving the balanced budget objective by 2023, said Moody’s.
The budget for fiscal 2020 is in line with the pre-budget statement issued in November, Moody’s said in a special comment.
“However, implementation will be challenging not least because of a history of overspending relative to budget targets, but also given the government’s simultaneous desire to ensure a steady rate of non-oil GDP growth, support economic diversification and further reduce the unemployment rate. Public finance management reforms put in place in 2019, including the implementation of a new electronic payment and tracking system will help,” said Alex Perjessy, a Moody’s vice president.
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