On the occasion of issuing the state budget for the fiscal year 1416-1417 (1996), the Ministry of Finance and National Economy is pleased to make the following comments.
Concerning the Kingdom's general economic position, moderate growth has been maintained over the past year 1415-1416 (1995), with available data indicating that the economy grew by 4.3 percent at current prices, compared to only 1.4 percent the year before. This can be attributed to the good growth rate achieved both in the government and in the petroleum sectors, as well as that by industrial activity in the private sector, whose growth rate was estimated at 7.5 percent.
The value of non-oil exports, which have successfully penetrated international markets, is projected to reach SR 23.8 billion (U.S. $ 6.4 billion) in 1995, an increase of 42 percent over the year before. This performance has had an effect on the balance of trade in spite of an increase in imports. The cut in the deficit is estimated to have been from SR 34 billion (U.S. $9 billion) in fiscal year 1414-1415 (1994) to SR 18.9 billion (U.S. $5 billion) in 1415-1416 (1995). The rate of inflation has continued to be low as a result of the openness of the Saudi market and the prevailing competitive environment.
Price increases in certain commodities and services at the beginning of 1995 led to a one-time 5 percent jump in the cost of living index, but retail prices of imports declined slightly, and indications are that the non-oil gross national product (GNP) deflator will not exceed 3.5 percent, as compared with 2.1 percent the year before. This means that the overall performance of the Saudi economy is good, in spite of economic adjustment to international oil market conditions, and this has helped other sectors to continue improving. For example, the banking sector is maintaining excellent profit rates, with improved efficiency and an increased capital base now reaching SR 34.4 billion (U.S. $ 9.1 billion), or 17.6 percent of total banking deposits.
Concerning the national budget for 1416-1417 (1996), the following is a summary of the appropriations for the main sectors.
Since for the fiscal year 1416-1417 (1996) total revenues from all sources are estimated at SR 131.5 billion (U.S. $ 35 billion), and public expenditure will be SR 150 billion (U.S. $ 40 billion), the fiscal deficit is estimated at SR 18.5 billion (U.S. $4.9 billion).
A. Education SR 27,626,737,000 (U.S. $ 7,367,130,000)
B. Health & Social Services SR 13,329,290,000 (U.S. $ 3,581,117,333)
C. Municipal & Water Services SR 5,378,269,000 (U.S. $ 1,434,200,000)
D. Transport & Communications SR 9,194,608,000 (U.S. $ 2,451,095,466)
E. Infrastructure, Industry, & Power SR 6,107,622,000 (U.S. $ 1,628,699,200)
F. Domestic Subsidies SR 6,858,507,000 (U.S. $ 1,828,932,800)
In addition, certain specialized development institutions such as the Industrial Development Fund, the Real Estate Development Fund, the Agricultural Bank, and the Bank of Credit, will continue to provide loans to private projects, to an estimated level of SR 5,888,000,000 (U.S. $ 1,570,000,000), more than SR 500 million (U.S. $ 133 million) higher than last year. The support to economic development provided both directly and indirectly by these institutions, as well as the investment activities carried out by major companies such as Saudi Aramco, Petromin, and Sabic, represent an important impetus to economic activity and the formation of capital.
THE 1996 BUDGET DECREES
Three royal decrees were issued today approving for the fiscal year 1416-1417 (1996), the national budget and budgets for municipal services and for associated establishments.
1. State revenues for the fiscal year 1416-1417 (1996) are estimated at SR 131.5 billion (U.S. $ 35 billion); and public expenditure for the fiscal year 1416-1417 (1996) is approved at SR 150 billion (U.S. $ 40 billion).
2. In accordance with the financial system, all revenues are to be paid to the Saudi Arabian Monetary Agency (SAMA) for the account of the Ministry of Finance and National Economy.
3. The Ministry of Finance and National Economy is authorized to obtain loans in order to meet the gap between revenues and expenditure for the fiscal year 1416-1417 (1996).
4. Expenditure is to be dispersed according to the budget and regulations pertaining to it.
5. Transfers in allocations from one chapter to another are to be submitted for approval by the Prime Minister in a joint report by the concerned ministers or by the head of an independent budget administration and the Minister of Finance and National Economy; while transfers within chapters are to be decided on by the concerned minister or head of an independent budget administration, provided that the sum to be transferred does not exceed half of the sum originally allocated in the budget, with the exception of salaries which should only be transferred according to the first part of this paragraph.
6. It is not permitted to use any appropriation except in the sphere it is allocated for, nor to issue a payment order in a way exceeding the appropriation specified in the budget, or to commit to any expenditure that is not allocated in the budget.
7. It is not permitted to issue any decision or conclude any contract in a way that entails any obligation for a subsequent fiscal year with the exception of contracts of a continual or periodical nature; import contracts approved in the second chapter; or contracts of projects that cannot be divided.
8. If it appears during the current fiscal year that some funds are subject to commitment from past years in a way that exceeds the approved allocation, then the case is to be submitted to the cabinet if the excess is due to an unjustifiable act, otherwise the Minister of Finance and National Economy is authorized to release funds from the appropriations of the current fiscal year.
9. It is not allowed to appoint or employ workers except in posts approved by this budget.
10. No new posts or grades will be created other than approved in this budget, with the exception of the appointment of ministers, and except in posts that are created in line with the conditions included in the system for temporary employment.
11. Each authority's administrative units are approved according to the general budget and can only be amended in a decision by the committee for administrative reform.
12. The Minister of Finance and National Economy will issue the required instructions for the implementation of this budget within the limits of the regulations stipulated.
13. The Deputy Prime Minister and the Ministers are to carry out this decree.
1. Expenditure for the municipalities and water departments for the fiscal year 1416-1417 (1996) is estimated at SR 5,378,269,000 (U.S. $ 1,434,200,000).
2. Revenues for the municipalities and water departments for the fiscal year 1416-1417 (1996) are estimated at SR 852,000,000 (U.S. $ 227,200,000).
3. The difference amounting to SR 4,526,269,000 (U.S. $ 1,207,005,066) is to be approved in the state's general budget.
4. The municipalities and water departments are to collect their revenues in line with the set regulations and the concerned authorities are to follow up the implementation of this.
5. Expenditures are to be dispersed according to the relevant financial systems and rules.
6. The rules stipulated in articles 5, 6, 7, 8, 9, 10, 11, and 12 of royal decree M/11 dated 10/8/1416 (01/01/96) are to be valid for the budgets of municipalities and water departments.
7. Surplus from the appropriations of branch municipalities is to be transferred only with approval from the Prime Minister on recommendation by the Minister of Municipalities and Rural Affairs and by the Minister of Finance and National Economy.
8. The Minister of Finance and National Economy will issue the required instructions for the implementation of this budget within the limits of the regulations stipulated.
9. The Deputy Prime Minister and the Ministers are to carry out this decree.
revenues and expenditure of those establishments that have budgets annexed to the national budget for the fiscal year 1416-1417 (1996) have been projected as follows.
1. The Ports Authority SR 511,899,000 (U.S. $ 136,293,066)
2. The National Airline Saudia SR 8,476,400,000 (U.S. $ 2,260,373,333)
3. Consolidated Electricity Corp. SR 610,474,000 (U.S. $ 162,793,063)
4. General Organization for
Grain Silos & Flour Mills
revenues SR 2,514,000,000 (U.S. $670,400,000)
expenditure SR 3,044,101,000 (U.S. $ 811,760,266)
5. Saline Water Conversion Corp. SR 1,915,352,000 (U.S. $ 510,760,533)
6. Saudi Railway Organization SR 175,327,000 (U.S. $ 46,753,866)
7. Petroleum & Minerals Org. SR 42,937,000 (U.S. $ 11,449,866)
8. Royal Commission for
Jubail and Yanbu SR 947,861,000 (U.S. $ 252,762,933)
9. Saudi Arabian Standards Org. SR 39,330,000 (U.S. $ 10,488,000)
10. King Saud University SR 1,356,495,000 (U.S. $ 361,732,000)
11. King Abdul Aziz University SR 985,477,000 (U.S. $ 262,793,866)
12. King Fahd University of
Petroleum & Minerals SR 301,971,000 (U.S. $ 80,525,600)
13. Imam Muhammad Bin Saud
Islamic University SR 746,377,000 (U.S. $ 199,033,866)
14. Madinah Islamic University SR 159,617,000 (U.S. $ 42,564,533)
15. King Faisal University SR 347,187,000 (U.S. $ 92,583,200)
16. Um Al-Qura University SR 487,302,000 (U.S. $ 129,947,200)
17. Technical Education
& Vocational Training Org. SR 956,552,000 (U.S. $ 255,080,533)
18. King Abdul Aziz City for
Science & Technology SR 265,162,000 (U.S. $ 70,709,866)
19. Public Administration Institute SR 135,753,000 (U.S. $ 36,200,800)
20. Saudi Red Crescent Society SR 138,248,000 (U.S. $ 36,866,133)
21. Military Industries Org. SR 383,159,000 (U.S. $ 102,175,733)
22. Pension Fund
revenue SR 17,722,000,000 (U.S. $ 4,725,866,666)
expenditure SR 8,289,140,000 (U.S. $ 2,210,437,333)
surplus revenues or allocations for expenditure are to be returned at the end of the year to the Saudi Arabian Monetary Agency (SAMA).
revenues are to be collected and expenditure dispersed in accordance with the relevant regulations and instructions.
with the exception of Saudi Arabian Airlines, which prepares its budget in line with commercial auditing regulations, the budgets of all public organizations and institutions will be subject to the rules stipulated in articles 5, 6, 7, 8, 9, 10, 11, and 12 of royal decree M/11 dated 10/8/1416 (01/01/1996) approving the national budget for the fiscal year 1416-1417 (1996).
the Minister of Finance and National Economy will issue the required instructions for the implementation of this budget within the limits of the regulations stipulated.
the Deputy Prime Minister and the Ministers are to carry out this decree.