Saudi Arabia’s financial situation has been closely linked to oil prices.
The majority of the revenue is from oil exports. Its oil revenue has decreased more than 50% due to the oil price slump in 2014.
Oil comprises 30-40 percent of the real GDP of Saudi Arabia.
Saudi understood the need to diversify decades ago. It became more serious after the 2014 oil price shock. But that means more expenditure and efforts to push for the economic reform.
A “Vision 2030” was announced in 2016. (original English copy)
While expenditure kept increasing, Saudi government has quickly generated its deficits since 2014. Deficit in 2015 is at a similar level of its surplus in 2012 – a SAR 740 billion difference in 3 years. And debts are accumulated quickly.
Saudi has planned to eliminate its deficit by 2023, which could be easily done if oil price maintains.
In Dec 2018, Saudi released its budget of 2019, which includes an expenditure of over SAR 1 trillion and a deficit of SAR 131 billion.
While the sixth straight deficit is not something to worry about, the real question is to what level Saudi can diversify its economy and becomes a sustainable nation even without oil. (the contribution of non-oil revenues to total revenues up from 12% in 2014 to 32% in 2018)