1、1 2020 KPMG Al Fozan tracks of high schools and specialized academies, e-learning and distance education, digital transformation and information security, teacher preparation programs, education for people with special needs, early childhood and elementary grades, and transforming community colleges

2、 into colleges that grant an applied diploma. There is also more focus on for scholarships, both to drive inclusivity and to strive for academic excellence. Healthcare and Social Development Expenditure in the healthcare sector was most acutely impacted by the COVID-19 outbreak, as the virus sparked

3、 a sudden demand to an emergency response to take care of those affected, while new health and safety procedures were implemented. The government also decided to fund COVID-19 treatments for everyone affected citizen, residents, visitors, even those staying in the Kingdom undocumented as well as fun

4、d quarantine stays in hotels both for those inside the country and citizens abroad. Extra expenditure on the COVID-19 was both taken from a centrally allocated emergency budget and some diverted from existing and planned healthcare budgets. Indeed, some of the spending on the healthcare transformati

5、on was delayed as a result of the pandemic, though at the end of 2020, the Ministry of Health indicates strong efforts to put the transformation back on track, thus we expect traction to pick up again in 2021. The net impact of the outbreak in 2020 was to cause estimated Healthcare spending to fall

6、by 8.5%, compared with the 12.1% fall originally planned, reflecting in part lower social development outlays. The budget for Healthcare and Social Development in 2021 is set to increase by 4.6% to SAR 175 billion, from SAR 167 billion budgeted in 2020. Efforts to separate the payor, provider and re

7、gulatory functions, and the implementation of the Model of Care and Accountable Care Organizations in the decentralized healthcare clusters will continue to dominate the healthcare agenda. Finally, it is expected that PPPs will accelerate in the coming years to ease the pressure on infrastructure sp

8、ending. 2020 KPMG Al Fozan substantial fiscal reserves; and a large stock of foreign exchange reserves that support the currency peg. The reaction function of the government going forward will nevertheless be crucial in deciding future ratings movements. For example, a continued commitment to improv

9、ing the fiscal accounts over the medium term in a sustainable manner. Here, the Kingdoms existing efforts to diversify sources of public revenue (including under commitments to fiscal sustainability under Vision 2030) and economic growth may support its credibility as investors reassess sovereign an

10、d contagion risk globally. COVID-19 continues to undermine the economies of Saudi Arabias key trading partners The budget statements key assumptions are a recovery in international oil prices and domestic economic activity in 2021. Much will depend on how COVID-19 progresses. A return to normality n

11、ext year, namely a permanent removal of pandemic-related restrictions, will depend on vaccine and therapy development and distribution. Success, as seems likely on these fronts, in the first quarter of 2021, would speed up economic recoveries in Saudi Arabias major export markets (including an oil p

12、rice recovery). Risks remain in relation to containing the pandemic, however. Beyond this, the economic fall-out is likely to bring continued uncertainty in several areas. Fiscal consolidation efforts are likely to slow economic recovery in the OECD, for example. Moreover, company and household bank

13、ruptcies remain a risk abroad leverage was high across large parts of the world even before the pandemic. 13 2020 KPMG Al Fozan & Partners Certified Public Accountants, a registered company in the Kingdom of Saudi Arabia, a member firm of the KPMG global organization of independent member firms affi

14、liated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. Economic indicators 14 Source: IMF, MoF, Annual Budget Statements A | Actual E | Estimated P | Projected - | N/A Table 1: Economic indicators 2020 KPMG Al Fozan & Partners Certified Public Ac

15、countants, a registered company in the Kingdom of Saudi Arabia, a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. Disclaimer: figures are rounded up to the nearest

16、 billion throughout the report. Some figures may not add up to 100 percent due to rounding. Contacts 2020 KPMG Al Fozan & Partners Certified Public Accountants, a registered company in the Kingdom of Saudi Arabia, a member firm of the KPMG global organization of independent member firms affiliated w

17、ith KPMG International Limited, a private English company limited by guarantee. All rights reserved. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely in

18、formation, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The KPMG

19、 name, logo are registered trademarks or trademarks of KPMG International. Arvind Singhi Head of Clients and Markets KPMG in Saudi Arabia Kilbinder Dosanjh Senior Economist Peter Bannink Thought Leadership Lead Anmol Uppal Economist For comments, please contact us at: Ismail Alani Head of Government and Public Sector KPMG in Saudi Arabia Contributors