| RIYADH, April 27
RIYADH, April 27 Saudi Arabia's government is
making faster than expected progress in cutting costs and that
is the main reason for a stronger budget position so far this
year than originally projected, a top official said on Thursday.
Last week King Salman announced he was restoring financial
allowances for civil servants and military personnel, after
cutting them sharply last September to help curb a huge budget
deficit caused by low oil prices.
Vice Minister for Economy and Planning Mohammed al-Tuwaijri
told Reuters the government was able to take this step, while
remaining on track to eliminate its deficit by 2020, largely
because of big gains from cost cutting.
The deficit was 26 billion riyals ($6.9 billion) in the
first quarter of this year, far below the government's
projection of 56 billion riyals, he said.
About 17 billion riyals of the difference was due to cutting
costs while roughly 4 to 5 billion riyals was contributed by
higher than expected non-oil revenues, with other factors
responsible for the rest of the difference, Tuwaijri said.
The government is trying to make its sluggish bureaucracy
operate more efficiently and to reduce waste in procurement and
other areas. Its original 2017 budget plan made conservative
assumptions about how much money would be saved in this way.
Now, the full potential for cost cutting is becoming clearer
to policymakers, Tuwaijri said.
"When we talk about efficiency and potential, this is a
major upside for Saudi Arabia. Definitely there is still a lot
of opportunity for cost rationalisation."
Tuwaijri said policymakers had voted to restore the civil
service allowances, which were very unpopular among many
citizens, to improve welfare and stimulate economic growth, but
had done so only after confirming that the extra spending would
be offset in other areas.
"The decision on a balanced budget by 2020 hasn't changed -
it stays the same."
The government's original 2017 budget plan projected a
deficit of 198 billion riyals ($52.8 billion) for the full year.
($1 = 3.7502 riyals)
(Reporting by Andrew Torchia, editing by David Evans)