Saudi Budget Deficit Narrows as Oil Revenue Jumps

Saudi Arabia's budget deficit narrowed in the second quarter due to higher oil revenue. The deficit shrank to SAR34 billion ($9 billion), a 1 percent decrease from the same period last year.

The improvement was largely driven by a 22 percent year-on-year rise in oil revenue, which should ease pressure on Saudi Arabia's borrowing needs.

Aramco reported higher profits thanks to rising international oil prices and its ability to export through Red Sea ports. However, the sustainability of these exports has been cast into doubt by a return to hostilities in the Red Sea with the Houthi militia.

The second quarter budget deficit also included record-high quarterly non-oil revenue of SAR154 billion. Non-oil receipts hit a record high, while social benefits spending rose 37 percent compared to last year, suggesting increased spending on shielding lower-income households from inflationary impacts.