Saudi Arabia announces a $ 13.3 billion government spending cut and project delays due to oil prices and the Coronavirus crisis
Saudi Finance Minister Muhammad Al Jadaan said on Wednesday that government expenditures in the travel and assignment parts were reduced, and projects were delayed due to the drop in oil prices due to the Coronavirus.
Al Jadaan added during a press conference that the government has the financial ability to deal with the crisis and keep the deficit under control, and that it is studying additional measures to reduce government spending.
The Saudi budget revenues were damaged by the decline in oil prices, the country’s main source of income, which necessitated a partial reduction in some of its budget items, by 50 billion riyals (13.3 billion dollars).
Saudi Arabia announced the 2020 budget, spending 272 billion dollars, against revenues of 222 billion dollars, anticipating a deficit of 50 billion dollars.
Al Jadaan said that the volume of borrowing this year could reach 220 billion riyals (59 billion dollars), while it was planned 120 billion riyals (32 billion dollars) before “Coronavirus”.
This month, Saudi Arabia launched a $ 7 billion sovereign bond in light of the drop in oil prices.
The Saudi public debt rose to $ 181 billion at the end of 2019, representing 24 percent of GDP, while it expects to rise to $ 201 billion in 2020 (26 percent of output) before the advent of Coronavirus.
He added: “We expect negative growth for the non-oil sector this year for the first time… and we are now conducting intensive studies to restore the movement of the economy if health conditions permit”.
He added: “Reopening the economy will depend on priorities, the first of which is human health, and then a gradual opening of activities”.
Saudi Arabia had announced two stimulus packages to deal with the repercussions of the Coronavirus, with more than $ 58 billion, including $ 12.5 billion for the health sector.
He explained that his country is considering postponing the annual fees on expatriate labor with the establishments for six months, 9 months or a year, or even exempting them completely if necessary.
On Wednesday, the Saudi Ministry of Health announced that 1141 new infections had been registered in Coronavirus, which raised the total to 12,772.
