Saudi Arabia Raises Government Spending to $60 Billion in Q1 2020
Saudi Arabia revealed that government spending for Q1 2020 has increased to $60 billion with total revenue standing at $51 billion, leaving a $9 billion deficit.
Saudi financial results were released amid difficult conditions faced by the international economy, as oil revenues take a nosedive with prices in the global markets tumbling under the repercussions of the coronavirus crisis, which also impacted the results of the non-oil sector.
That reversed a first quarter surplus of around $7.4 billion in 2019.
The Saudi Finance Ministry, in a statement published on its website, revealed that total revenues dropped 24 percent to 192 billion riyals, mainly driven down by slumping global crude demand and prices as the coronavirus outbreak paralyzed large parts of the global economy. Total expenditures reached 226.179 billion riyals, rising 4% from a year ago.
An International Monetary Fund official had told Reuters last year that the Gulf Arab state would need oil prices to average $85-87 a barrel this year to balance its state budget.
The ministry said it would finance the budget deficit through local and international borrowing.
Finance Minister Mohammed al-Jadaan said earlier this month that the kingdom could borrow around $26 billion more this year and will draw down up to $32 billion from its reserves to finance the government deficit.
He also said the government expected the COVID-19 crisis to last for a few more months but that it would have a limited impact on its first-quarter revenue.
Saudi Arabia had projected a deficit of $50 billion this year, or 6.4% of gross domestic product (GDP), widening from around $35 billion last year.
Non-oil revenues in the first quarter fell 17% when compared to the same period one year earlier, with revenues from taxes on goods and services plunging.