Fitch Ratings hails kingdom's 2016 budget

New York, Rabi’I 27, 1437, January 07, 2016, SPA — Fitch Ratings hailed the Kingdom of Saudi Arabia’s 2016 budget saying it contains reforms on expenditure restraint.

It said that the 2016 budget outlines measures to improve the fiscal policy framework through rationalizing and management of expenditure and entering privatization to slow the growth of recurring expenditure, especially wages, salaries and allowances, adopt a medium-term expenditure framework and create a debt management office.

It added that the 2016 budget also contains measures to adapt to lower oil prices which focus on petrol and utility price hikes and continuing reform “gradually over the next five years.” At the same time, the measures will be key to resolving the Negative Outlook on Saudi ‘AA’ sovereign rating, it said.

It said that kingdom’s seeking to increase non-oil revenues is a positive step to reduce the expected budget deficit this year, noting that the Saudi government will finance this deficit as it did in 2015 through resorting to reserves and issuance of local and international bonds.

It stated that the kingdom is following a course to avoid the affects of oil revenues decline in its current budget.

23:29 LOCAL TIME 20:29 GMT