Saudi Finance Minister Mohammed Al-Jadaan expected that the Kingdom's budget deficit will grow this year to 9% of GDP, after estimates were 6.4% in the previous forecast, and this is due to the background of falling oil prices and the impact of the outbreak of Corona virus.
Al-Jadaan revealed that the government has a flexible plan that is based on a mixture of spending cuts, borrowing and withdrawing from reserves, stressing the importance of avoiding withdrawing from reserves or monetizing the government investments.
Al-Jadaan disclosed that the Kingdom will raise the level of borrowing despite the availability of huge reserves, pointing out that the government has extensive financial capabilities, and he added: We have very large reserves, but we would like not to withdraw from the reserves more than what is scheduled, and we will borrow by increasing the borrowing rate from 30% of the GDP (785 billion dollars) to 50% until the end of 2022.
The Minister of Finance confirmed that the budget deficit in 2020 will rise, but it will not exceed 7 to 9%, pointing at the same time that spending will decline in various sectors, including entertainment, sports and tourism, stressing that the Kingdom will commit to pay the dues of contractors and suppliers, and has the financial ability to continue to paying off.
Source (Al-Sharq Al-Awsat Newspaper, Edited)
