"Today's update presents clear evidence of progress towards achieving fiscal balance by 2020," finance minister Mohammed al-Jadaan said in a statement.
"Whilst economic challenges remain, we are confident in achieving our fiscal deficit projections for 2017," he added. The government has projected a deficit of 198 billion riyals or roughly 8 per cent of gross domestic product this year, down from an actual 297 billion riyals in 2016.
Revenues increased 6 per cent from a year ago to 163.9 billion riyals in the second quarter. However, that was because of higher oil prices and Riyadh appeared to make little progress overall in developing non-oil revenues, which are key to its long-term drive to wean itself off dependence on energy exports.
Spending dropped 1.3 per cent to 210.4 billion riyals in the second quarter because of a nearly 40 per cent fall in the government's "use of goods and services" - a sign that to save money, Riyadh was continuing to hold back on expenditure on infrastructure projects and was cutting operating costs.