Record budget spurs Saudi economy

Arab News
December 19, 2018

Riyadh, Dec 19: Saudi Arabia on Tuesday announced its biggest-ever budget — with spending set to increase by around 7 percent — in a move aimed at boosting the economy, while also reducing the deficit.

However, analysts cautioned that the 2019 budget is based on oil prices far higher than today — which could prove an obstacle in hitting targets.

Government spending is projected to rise to SR 1.106 trillion ($295 billion) next year, up from an actual SR 1.030 trillion this year, Minister of Finance Mohammed Al-Jadaan said at a briefing in Riyadh.

The budget estimates a 9 percent annual increase in revenues to SR 975 billion. The budget deficit is forecast at SR 131 billion for next year, a 4.2 percent decline on 2018.

“We believe that the 2019 fiscal budget will focus on supporting economic activity — investment and wider,” Monica Malik, chief economist at Abu Dhabi Commercial Bank (ADCB), told Arab News.

“It is a growth-supportive budget with both capital and current expenditure set to rise.”

A royal decree by Saudi Arabia’s King Salman, also announced on Tuesday, ordered the continuation of allowances covering the cost of living for civil sector employees for the new fiscal year.

“The continuation of the handout package will be positive for household consumption by nationals,” said Malik. “We expect to see some overall fiscal loosening in 2019, which should support a further gradual pickup in real non-oil GDP growth.”

World oil prices on Tuesday tumbled to their lowest levels in more than a year amid concerns over demand. Brent crude contracts fell to as low as $57.20 during morning trading.

Malik cautioned that the oil-price assumptions in the Saudi budget looked “optimistic.”

“We see the fiscal deficit widening in 2019, with the higher spending and forecast fall in oil revenue,” she told Arab News.

Jason Tuvey, an economist at London-based Capital Economics, agreed that the oil forecast was optimistic, but said this should not pose problems for government finances.

“The government seems to be expecting oil prices to average $80 (per barrel) next year,” he said.

“In contrast, we think that oil prices will stay low and possibly fall a little further to $55 … On that basis, the budget deficit is likely to be closer to 10 percent of GDP. That won’t cause too many problems given the government’s strong balance sheet.

“Overall, then, we think that there will be some fiscal loosening in the first half of next year, but if oil prices stay low as we expect, the authorities will probably shift tack and return to austerity from the mid-2019, which will weigh on growth in the non-oil sector,” Tuvey said.

John Sfakianakis, chief economist at the Gulf Research Center, based in Saudi Arabia, said that the targets of the budget were “achievable” and the forecast oil price reasonable.

“It is an expansionary budget that should spurt private sector activity and growth,” he said.

“With Brent crude averaging around $68 per barrel for 2018 and $66 per barrel for 2019, the authorities have applied a conservative revenue scenario.”

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News Network
November 15,2024

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Iran’s Islamic Revolution Guards Corps (IRGC) has killed or captured 69 terrorists linked to the Israeli spy agency Mossad during a major counterterrorism drill in the country's southeast, its spokesman says.  

General Ahmad Shafaei, the spokesman for the “Martyrs of Security” drill, said Friday that a total of 23 terrorists have been killed and another 46 arrested in various clean-up operations ever since the IRGC Ground Force launched it in the Sistan and Baluchestan province on November 1.

Seven terrorists have also turned themselves in during the period.

“The undeniable fact about terrorists is that they rely on arrogant powers, particularly the intelligence service of the wicked and vicious Zionist regime," Shafaei said.

“Unfortunately, weapons and munitions at terrorists’ disposal are among the most sophisticated ones in the world. This accounts for their heavy dependence.” 

The official stated that several members of the disbanded terror teams were non-Iranian nationals, who had been hired by foreign intelligence agencies to carry out acts of sabotage and terror inside Iran.

In a most recent operation, six terrorists were arrested and four others were eliminated, three of whom were non-Iranians, he added. 

On October 26, ten members of Iran's law enforcement forces were killed in a terrorist attack in the Gohar Kuh district of Taftan in the Sistan and Baluchestan province.

The so-called Jaish al-Adl terrorist group claimed responsibility for the assault, which was one of the deadliest in the province in recent months.

The group has carried out numerous terrorist attacks in Iran, primarily in Sistan and Baluchestan.

Its tactics include the abduction of border guards as well as targeting civilians and police stations within the province to incite chaos and disorder.

In January, Iran launched a military operation during which the headquarters of the Pakistan-based terrorist group was targeted in missile strikes, destroying its infrastructure.

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News Network
November 14,2024

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The UN special rapporteur for Palestine has slammed Israel’s parliament for passing a law authorizing the detention of Palestinian children, who are “tormented often beyond the breaking point” in Israeli custody.

Francesca Albanese, the UN special rapporteur on the rights situation in the Occupied Palestinian Territory, in a Thursday post on X, characterized the experiences of Palestinian minors in Israeli detention as extreme and often inhumane.

The UN expert highlighted the grave impact of this policy, noting that up to 700 Palestinian minors are taken into custody each year, a practice she described as part of an unlawful occupation that views these children as potential threats.

Albanese said Palestinian minors in Israeli custody are “tormented often beyond the breaking point” and that “generations of Palestinians will carry the scars and trauma from the Israeli mass incarceration system.”

She further criticized the international community for its inaction, suggesting that ongoing diplomatic efforts, which often rely on the idea of resuming negotiations for peace, have contributed to normalizing such human rights violations against Palestinian children and the broader population.

The comments by Albanese came in response to Israel’s parliament (Knesset) passing a law on November 7 that authorizes the detention of Palestinian children under the age of 14 for “terrorism or terrorist activities.”

Under the legislation, a temporary five-year measure, once the individuals turn 14, they will be transferred to adult prison to continue serving their sentences.

Additionally, the law allows for a three-year clause that enables courts to incarcerate minors in adult prisons for up to 10 days if they are considered dangerous. Courts have the authority to extend this duration if necessary, according to the Knesset.

The legislation underscores a shift in the treatment of minors and raises alarms among human rights advocates regarding the legal and ethical ramifications of detaining children and the conditions under which they may be held.

Thousands of Palestinians, including hundreds of children and women, are currently in Israeli jails—around one-third without charge or trial. Also, an unknown number are arbitrarily held following a wave of arrests in the wake of the regime's genocidal war on Gaza.

Since the onset of the Gaza war, the Israeli regime, under the supervision of extremist minister Itamar Ben-Gvir, has turned prisons and detention centers into “death chambers,” the ministry of detainees and ex-detainees’ affairs in Gaza says.

Violence, extreme hunger, humiliation, and other forms of abuse of Palestinian prisoners have been normalized across Israel’s jail system, reports indicate.

Over 270 Palestinian minors are being detained by Israeli authorities, in violation of UN resolutions and international treaties that forbid the incarceration of children, as reported by Palestinian rights organizations.

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News Network
November 12,2024

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The Palestinian Hamas resistance movement says its fighters have killed at least 20 Israeli soldiers in northern parts of the besieged Gaza Strip in just two days, in retaliation for the occupying regime’s genocidal war on the Palestinian territory.

In a statement on Monday evening, Hamas said that fighters of its military wing, al-Qassam Brigades, “killed at least five occupation soldiers” in northern parts of the coastal territory earlier in the day.

It added that Hamas fighters also killed 15 Israeli soldiers in the war-ravaged region on Sunday.

The resistance movement’s “qualitative operation … confirms once again the failure of the criminal Zionist entity to suppress and eradicate the Palestinian resistance, which continues to direct qualitative strikes against its terrorist soldiers,” Hamas further said on its Telegram channel.

Palestinians have increased their resistance operations in the face of intensified Israeli aggression in northern Gaza that has claimed the lives of more than 1,000 over the past weeks.

“Our valiant resistance is waging a war of attrition with the criminal enemy, inflicting daily losses on its soldiers and vehicles, and all of [Israeli prime minister Benjamin] Netanyahu’s bets and dreams of achieving any of his goals are failing,” the Gaza-based resistance movement added.

Hamas also vowed that Israel’s ongoing crimes and aggression against Gaza would be met with increased resistance and painful strikes, which will continue until the aggression against Palestinians ends and the regime fully withdraws from the blockaded territory.

As the war in Gaza enters its 14th month, the Health Ministry reports that Israeli attacks have killed at least 43,603 Palestinians and wounded 102,929 others.

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