• Added consequences of pandemic will remain key consideration as to how Kingdom spends money through next year and beyond

Arab News

DUBAI: Regional and international investors will be “relieved” after the Saudi budget 2021 announcement, Sachin Kerur, Head of Middle East at international law firm Reed Smith told Arab News.

“The 2021 Saudi budget will be one of the most important budget announcements in the Kingdom for many years. As the country looks forward to a post-COVID-19 world, the consequences of the pandemic will remain a key consideration as to how Saudi Arabia spends its money through next year and beyond. The headlines will focus on Saudi cutting spending by 7.5 percent, maintaining VAT increases and running a current budget deficit at least until 2023,” he said.

“However, when looking beyond the headlines, there are a number of areas to be applauded. In particular, the commitment to continue to diversify the economy from oil is very welcome. In the past when stress has impacted GCC economies, there has been a tendency to roll back diversification reforms. Saudi Arabia will be signalling that it has no such intent.

“The country will be driving forward with systemic economic changes and a continued commitment to Vision 2030. Regional and international investors will be relieved. Many have committed significant investment programs to the Kingdom and will have been eagerly awaiting a sign from the Saudi government that they can continue to do so. The emphasis on provision of social benefits, a massive housing program, privatization and fintech initiatives, and an exciting quality of life program, will boost the plans of the private sector to become a mainstay of the Saudi economy as the rest of this decades unfolds,” he added.