Saudi Arabia said yesterday it expects to run a budget deficit in 2009 for the first time in seven years. The world’s largest oil producer is seeking to bolster the economy by increasing public spending in spite of the collapse in crude oil prices.
The finance ministry said revenue was projected to be SR410bn (£73.6bn, $109bn, €78bn) in the next fiscal year, compared with a record SR1,100bn in 2008. It did not reveal its oil price forecast but economists estimated the government was predicting an average of $40 a barrel for 2009.
In spite of the dramatic decline in revenues, the government announced an expansionary fiscal policy, saying expenditure would be SR475bn for 2009. For the fiscal year 2008, planned expenditure was SR410bn but actual spending is projected to reach SR510bn.