RIYADH: Saudi Arabia will continue massive public spending despite a 50 percent drop in the price of oil, which provides the bulk of its revenue, the finance minister said yesterday.
Ibrahim bin Abdulaziz Al Assaf commented after completing the 2015 budget, which will be presented to cabinet “in the near future”, the Saudi Press Agency said.
Financial analysts expect the budget to be approved as early as Monday. The kingdom is the largest economy in the Arab world, and Opecs biggest crude producer.
Assaf said the budget comes during “challenging” global economic conditions but surpluses and reserves built over many years have given it “depth and a line of defence that come in handy in times of need”.
He said this policy will continue, enabling the government “to implement massive social projects” in health, education, social services and development as well as state security.
This spending, combined with private sector activity, is expected to bring positive economic growth, he said, without giving a figure.
Riyadh-based Jadwa Investment said in a December 7 report that the government should be in a comfortable position to adjust to lower oil prices and avoid drastic spending cuts.
It highlighted “the strong sovereign balance sheet, with foreign reserves of more than 95 percent of GDP and a public debt of less than two percent of GDP”.
Jadwa projected a fiscal deficit of 2.7 percent in 2015.AFP
