Saudi Arabia posted a deficit of SAR109.2 billion ($29.12 billion) in the second quarter this year as low oil prices hurt revenues, a finance ministry report published on Tuesday showed.
The Ministry also revealed in its report on quarterly budget performance that the total revenues recorded in the country’s public finance in H1 2020 has amounted to SAR326 billion ($89 billion).
Actual revenue stood at SAR133.94 billion ($35.7 billion), while expenditure was over SAR243.18 billion ($64.8 billion), the report added, noting that non-oil revenues amounted to SAR38.2 billion.
The coronavirus crisis has hurt the non-oil sectors of the world’s largest oil exporter this year, adding to the impact of historic price lows on the economy.
In addition to borrowing, the government has used around SAR48 billion ($13 billion) in government reserves in the second quarter to finance its deficit, budget data showed.
According to the report, the total second-quarter expenditures dropped annually by 17 percent to around $65 billion, although spending increased when compared to Q1 by 7.5 percent.
“A pullback in spending is essential for containing the deficit,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
“The proactive stance of the government was already reflected in the austerity measures announced in April. However, these will dampen the recovery outlook,” she said.
The International Monetary Fund has estimated the economy could shrink by 6.8 percent this year, a figure Saudi officials have said was “pessimistic.”
Saudi Arabia, which in the first three months of 2020 posted a $9 billion deficit, has raised $12 billion in international markets so far this year and has borrowed SAR41.1 billion ($10.96 billion) in the domestic market, the document showed.
