Saudi Gazette report

RIYADH — Saudi Minister of Finance Mohammed Al-Jadaan said that financial sustainability is the basis for achieving the desired economic diversification. Speaking at the "Saudi Budget 2025" forum in Riyadh on Wednesday, he said that the launching of the economic reforms involved "painful" decisions such as reducing subsidies and implementing value-added tax and selective tax, but the economy was able to overcome them, while in other economies they might have caused shocks.

Al-Jadaan stressed that the goal of these reforms is not to impose taxes and fees per se, but rather to reach a stage where public finances can sustainably support the economy. "We have currently reached non-oil revenues worth SR472 billion, which would not have happened without the current great economic diversification," he said.

The minister noted that the structural reforms represented challenges for the private sector. "During previous years, we witnessed the benefits of reforms, especially during the coronavirus pandemic crisis. We use debt instruments to balance revenues and pay them with debt to cover expenses on an ongoing and sustainable basis," he pointed out.

Al-Jadaan said that a very large part of sustainable economic growth depends on sustainable public finance, especially in economies similar to the Kingdom's economy. Therefore, public finance focuses its spending on sectors that have a direct impact on economic development and economic diversification.

The minister stressed that maintaining the sustainability of public finances is essential to achieve economic diversification. "The Saudi Vision 2030 aims to maintain sustainable public finance away from fluctuations in some revenues such as oil-based revenues to maintain the sustainability of diversifying sectors that require a long-term and stable outlook," he added.