Saudi Arabia is expected to record a fiscal deficit this year after reviewing its budget projections, the Kingdom's Finance Ministry announced late on Saturday.

Initially, Riyadh had planned for a surplus of 16 billion Saudi riyals ($4.27 billion) in 2023, however, the Ministry expects a deficit of 82 billion Saudi riyals ($21.86 billion), which amounts to 2% of the country's gross domestic product (GDP).

Saudi Arabia blames falling revenues on a drop in expected oil revenue as its attempts to raise oil prices by cutting global production failed.

The Ministry expects a deficit of 79 billion riyals, equivalent to 1.9% of Saudi Arabia's GDP in 2024.

In December 2022, the country announced its first-ever annual budget surplus in nearly a decade after oil prices rose as a result of the war in Ukraine, which led to disruption in the world's energy supply chains.

This year, oil revenue fell by 17% as prices fell and Riyadh cut production in an attempt to push prices up.

Currently, Saudi Arabia produces 9 million barrels per day, which is two million fewer barrels a day year-on-year.

A rise in expenditure has also contributed to the predicted deficit, as the government led by Crown Prince Mohammed bin Salman (MBS) implements programs related to its controversial Vision 2030.

The Ministry says non-oil sectors have seen a revenue jump of 11% in the first half of 2023, while it expects fiscal deficits to persist into 2026.

Saudi Finance Minister Mohammed al-Jadaan said the government "will continue implementing fiscal and economic structural reforms to help develop and diversify the Saudi economy, and to increase economic growth while maintaining fiscal sustainability."

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