Riyadh: Saudi Arabia will trim this year’s budget by around five per cent, the finance minister said, in its first austerity measure as the economy reels from the fast-spreading coronavirus and crashing oil prices. Saudi Arabia is bracing for an economic slump after it shut down cinemas, malls and restaurants, suspended the year-round umrah pilgrimage and locked down eastern Qatif region in a bid to contain the deadly coronavirus.
The world’s top crude exporter also faces plunging oil prices, the mainstay of government revenue, which slipped below $25 a barrel this week to touch 18-year lows on the back of sagging demand and a price war with Russia.
“The size of the partial reduction ... has reached approximately 50 billion riyals ($13.32 billion), which represents less than 5 per cent of the total expenditures approved in the budget for 2020,” said Finance Minister Mohammed al Jadaan.
In a statement released by the Saudi Press Agency late on Wednesday, the minister added the cuts would have “the least social and economic impact”. But the economic consultancy Nasser Saidi and Associates has reported the cuts will be deeper, saying the finance ministry has instructed various government bodies to submit proposals to slash this year’s spending by 20 to 30 per cent. — AFP
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