DUBAI, Nov 1 (Reuters) - Saudi Arabia posted a budget deficit of 35.8 billion riyals ($9.54 billion) in the third quarter, data released by the finance ministry showed on Wednesday, as oil revenue fell sharply.
The budget deficit for the first nine months of the year stood at 44 billion riyals, the finance ministry said in a budget update.
The world’s top oil exporter recorded a budget surplus of almost $30 billion in 2022 as higher oil prices last year boosted government revenue by 31%.
But lower prices and extended voluntary cuts to crude production this year, which the kingdom says is a pre-emptive step to stabilise markets, have hit oil revenue and weighed on growth.
Total revenue in the third quarter was 258.5 billion riyals, down 14% year-on-year, of which oil revenue constituted 147 billion riyals, down 36% over the same period in 2022.
However, non-oil revenue, at 111.5 billion riyals, surged 53% from the prior-year period.
Saudi Arabia is midway through an economic transformation plan known as Vision 2030, putting an expanded private sector and non-oil growth at the centre of the kingdom's future development agenda.
Non-oil growth is forecast at around 6% in 2023 even as overall growth slows sharply, with higher government spending over the coming years expected to boost domestic demand further, and support non-oil GDP.
"The higher oil price from September will be supportive of the government’s spending and investment plans," Monica Malik, chief economist at Abu Dhabi Commercial Bank, said in a note.
Total spending in the third quarter stood at 294 billion riyals, up just 2% over the same period last year, driven by a substantial increase in spending on grants.
However, spending on subsidies was half the previous year's quarterly expenditure.
Total revenue in the nine-month period was down 10% while total spending in the same period was up 12%. ($1 = 3.7514 riyals) (Reporting by Rachna Uppal in Dubai and Yomna Ehab in Cairo; Editing by Chris Reese and Matthew Lewis)
