The Saudi government, which has the largest Arab economy, is planning to reduce expenditure to offset low oil prices, which constitutes the main source of the kingdom’s exports.
The largest oil exporter in the world is facing an unprecedented deficit in the wake of falling oil prices, by more than half within one year to roughly $50 per barrel, reports BBC Arabic.
Finance minister, Ibrahim Al-Assaf, says: “Some of the projects that have been adopted in advance could be delayed, though projects that are important for the economy will go ahead.”
The minister adds that spending on vital areas such as health, education and infrastructure will not be affected by the slash in expenditure.
The Saudi government has forecast a budget deficit of approximately $40 billion, but international analysts say that the deficit will be much higher.
The International Monetary Fund has estimated that the Saudi budget deficit this year will reach a record $130bn due to cheap oil.
($1 = AED 3.67, at the time of publishing)