Saudi Arabia on Thursday said it expects a budget deficit of 187 billion riyals (49.86 billion dollars), which is expected to widen for the seventh consecutive year because of low oil prices, That marks a substantial increase from a projected budget deficit of 131 billion riyals ($35 billion) for this year, Finance Minister Mohammed al-Jadaan said in a statement.
“It is projected that expenditure will reach 1,020 billion riyals in 2020, focusing on improving the efficiency of spending without any disruption to diversification and transformation plans,” the statement said.
Further, he said, “Revenues are projected to reach about 833 billion riyals in 2020, while the budget deficit is projected to reach about 6.5 percent of GDP.”
Saudi Arabia posted a budget deficit since 2014, when a crash in oil prices shrank country’s revenues. Prices have partially recovered since then, but in the face of persistent fiscal deficits, OPEC’s capital pillar has put in place many reforms to diversify its economy away from oil.
The prices of fuels and electricity has been increased, imposed a five percent value-added tax (VAT) and levied duties on 11 million expatriates in a bid to generate additional revenue.
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03 April, 2020