Jakarta, CNBC Indonesia – Although Saudi Arabia is known as a country rich in oil, the largest country in the Arabian Peninsula also has a lot of dependents. In fact, this Petrodollar country has to go into debt to meet its budget.
The first state budget deficit occurred in 2014, at which time Saudi Arabia reported a deficit of 54 billion riyals or around Rp.203 trillion rupiah. At that time the position of government debt reached 60.1 billion riyals (Rp 225 trillion).
This large deficit occurs due to the cost of expanding the Complex of two Muslim holy mosques, namely the Grand Mosque in Mecca and the Prophet’s Mosque in Medina, which is expected to accommodate 2.5 million worshipers visiting the two mosques. While on the other hand, the oil price at that time fell and made Riyadh unable to finance this expansion.
In 2015, the Saudis lost their money to the dealer again after the new king of Saudi Arabia, King Salman bin Abdulaziz Al Saud, decided to join the civil war in Yemen.
For the Saudis, Yemen, which is controlled by the Houthi group, which supports Iran, is a very important geopolitical key in expanding Riyadh’s influence in the Middle East. Apart from that, the low oil price also reduces the amount of state revenue that depends on the oil and gas sector.
The Saudi state budget deficit in 2015 swelled to 367 billion riyals (IDR 1,378 trillion). This fantastic deficit prompted Riyadh to increase its debt back. Total Saudi debt in 2015 increased to 142 billion riyals (IDR 533 trillion).
In 2016, the Saudi economy was better than predicted, but still on the brink of APBN deficit. The deficit of Saudi Arabia in 2016 reached 297 billion riyals (IDR 1,115 trillion), far from the predicted 326 billion riyals (IDR 1,224 trillion) while its total debt exploded to reach 316.5 billion riyals (IDR 1.188 trillion). This is still due to the low oil price in the last 2.5 years
The state of the Saudi economy has made the world worried about the future of the country, which depends heavily on oil and gas. In fact, the world has begun to shift its focus from oil to renewable energy that does not cause pollution.
In 2017, the Saudi state budget deficit narrowed. The deficit is only 8.9% of the total APBN. The total deficit fell to 230 billion riyals (IDR 863 trillion) while the country’s debt became 443.1 billion riyals (IDR 1,663 trillion)
Some of the things the Saudi Arabian government has done to reduce the deficit is to increase taxes on products such as cigarettes and packaged drinks. In addition, the royal country also overhauled tax regulations.
Entering 2018, Riyadh improved its economy well. It was noted that state revenues rose to 783 billion riyals (Rp.2,900 trillion) and a deficit of only 195 billion riyals (Rp732 trillion) while state debt rose to 558 billion riyals (Rp2,095 trillion)
In April 2018, Saudi Arabia issued bonds. The government bonds managed to attract funds of 41.25 billion riyals (Rp 154 trillion).
In 2019, the two holy cities experienced a deficit of 131.5 billion riyals (Rp.493 trillion) and increased debt to 657 billion riyals (Rp.2,466 trillion).
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