(Reuters) -Saudi Arabia’s budget deficit narrowed to 34.534 billion riyals ($9.21 billion) in the second quarter, marking a 41.1% decline from the previous quarter, as oil and other revenues rose, the finance ministry said on Thursday.
Oil income rose by 1.28% to reach 151.734 billion riyals, the ministry said.
The world’s top oil exporter saw its total revenues climb by nearly 14.4% to 301.595 billion riyals in April to June, of which 149.861 billion riyals came from non-oil industries, while public spending, rose 4.28% quarter-on-quarter to 336.129 billion riyals.
The kingdom’s oil exports in May rose to their highest in three months, data from the Joint Organizations Data Initiative (JODI) showed, as the OPEC+ group – comprising OPEC and allies such as Russia – began to unwind cuts of 2.17 million barrels per day (bpd) in April with a boost of 138,000 bpd, followed by further increases in recent months despite falling oil prices.
In the first quarter, the kingdom’s budget deficit widened significantly on a year-on-year basis to $15.65 billion from $3.30 billion in the same period a year earlier, as oil revenues dropped 18%.
Lower oil prices have weighed on Saudi Arabia’s revenue, with the kingdom projected to post a fiscal deficit of around $27 billion this year.
Still, the country has pushed forward with spending on a massive economic transformation programme known as Vision 2030 that aims to diversify its revenue sources to wean its economy off its dependence on oil.
A 12-day air war between Israel and Iran in June amplified geopolitical risk across the Gulf and raised concerns over regional stability that might threaten to slow foreign investments and tourism in the kingdom, though it briefly spiked oil prices by up to 7% on June 14 when the war first broke.
In June, the International Monetary Fund raised its 2025 GDP growth forecast for Saudi Arabia to 3.5% from 3%, partly on the back of demand for government-led projects and supported by the OPEC+ group’s plan to phase out oil production cuts.
Saudi Arabia’s public debt stood at 1.38 trillion riyals by the end of the second quarter, the finance ministry said in its statement.
($1 = 3.7511 riyals)
(Reporting by Yomna Ehab and Enas Alashray in Cairo, writiny by Nayera Abdallah and Yomna Ehab; Editing by Andrew Cawthorne and Susan Fenton)
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