Saudi Arabia's budget deficit in the third quarter of 2023 reached 35.8 billion riyals ($9.5 billion), nearly seven times larger than the previous quarter. The deficit was primarily attributed to a decline in both energy and non-oil income. Expenditure decreased by 8% to $78 billion, while revenues decreased by almost 18% to $69 billion. This decline in revenues was mainly due to lower oil and tax receipts. The country's economy contracted in the third quarter after cutting oil production in July to boost prices. Oil revenues declined by 18% to 147 billion riyals, while non-oil income decreased by 17% to 112 billion riyals. Saudi Arabia relies on oil prices above $86 per barrel to balance its budget, and even higher when accounting for spending by the sovereign wealth fund.
Meanwhile, Russia's budget deficit for the year is projected to be around 1% of its gross domestic product (GDP), according to Finance Minister Anton Siluanov. The deficit for January-October stood at 1.24 trillion roubles ($13.82 billion), or 0.7% of GDP. Higher oil prices and increased tax payments have helped the Russian government narrow its budget shortfall. Russia's 2023 budget plan envisions a deficit of 2.93 trillion roubles, or 2% of GDP.
In Jordan, the state spending is forecast at 12.4 billion dinars ($17.5 billion) in its draft 2024 budget, with growth expected to be around 2.6 percent. The budget deficit is expected to fall to 2.1 percent of GDP next year, and the government will not impose new taxes for a fourth year in a row. Public debt is expected to drop to 88.3 percent of GDP. The budget raises allocations for capital investments by 11.8 percent to a record 1.7 billion dinars, with most of the funds channeled into an economic modernization program. Jordan's commitment to IMF reforms and investor confidence in the outlook have helped maintain stable sovereign ratings.
Saudi Arabia's state-owned oil company, Aramco, will pay $31 billion in dividends to the Saudi government and other investors for the first quarter of 2024. This payout, which includes a special component, will help fund the kingdom's spending plans as it looks to diversify the economy away from oil. Despite lower profits, Aramco's massive dividend payments come as the country's economy has contracted for three consecutive quarters and the budget has been in deficit for six consecutive quarters. Saudi Arabia needs oil prices to be around $108 a barrel to balance the budget, but benchmark crude prices are currently trading below $84 a barrel. The country has revived a plan for a follow-on offering of Aramco's shares, but global investors are keeping an eye on the Saudi economy and oil output levels. The Organization of Petroleum Exporting Countries (OPEC) and its allies are expected to extend supply curbs into the second half of the year [9d943f4f].