RIYADH | SAUDI ARABIA – Saudi Arabia posted a deficit of 109.2 billion riyals ($29.12 billion) in the second quarter this year as low oil prices hurt revenues, a finance ministry report published on Tuesday showed.
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.
Second quarter oil revenues fell by 45% year-on-year to $25.5 billion. Total revenues dropped 49% to nearly $36 billion.
Total second-quarter expenditures dropped annually by 175 to around $65 billion, the report on quarterly budget performance showed, although spending increased when compared to Q1 by 7.5.
‘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.
Facing deep recession this year, Riyadh has introduced steps such as removing a cost-of-living allowance for state employee and tripling value-added tax to 15% to bolster stare revenues.
Economists have said this could restrict recovery as curbs aimed at reducing the spread of the coronavirus are lifted.
The IMF has estimated the economy could shrink by 6.8% this year, a figure Saudi officials have said was ‘pessimistic’.
Saudi Arabia, which in the first three month of 2020 posted a $9 billion deficit, has raised $12 billion in international markets so far this year and has borrowed 41.1 billion riyals ($10.96 billion) in the domestic market, the document showed.
Finance Minister Mohammed al-Jadaan said this month the kingdom plans to tap international debt investors at least once more this year.
In addition to borrowing, the government has used around $13 billion in government reserves in the second quarter to finance its deficit, budget data showed. That is largely within a $32 billion drawdowns limited targeted by the government this year.
Between March and April, however, the kingdom used $40 billion in foreign reserve to back overseas investments of its sovereign fund, the Public Investment Fund.
RIYADH – – Saudi Arabia’s Crown Prince Mohammed bin Salman has received a phone call from French President Emmanuel Macron in which they discussed bilateral relations. ‘During the call, they reviewed relations between the two countries and opportunities for joint cooperation. Regional and international developments were discussed, and a number of issues of common interest … Continue reading BREAKING NEWS | Saudi Crown Prince Receives Phone Call From French President Macron
RIYADH – – Saudi Arabia expects to re-open its embassy in Qatar in the coming days, Saudi’s foreign minister said on Saturday, following a U.S.-backed détente last week in a three – year-old dispute between Arab states. It is just a matter a logistics, Saudi Arabia’s Foreign Minister Faisal bin Farhan told journalists in Riyadh … Continue reading BREAKING NEWS | Saudi To Reopen Qatar Embassy In Coming Days – Saudi Minister
MILAN – – The start of the Formula One season has been delayed after the Australian Grand Prix was postponed from March to November because of the COVID-19 pandemic.The Australian race in Melbourne has been rescheduled from March 21 to November 21. The Chinese GP has also been delayed but no new date has been … Continue reading SPORTS | Formula One Season Set To Start In Bahrain After Australian Grand Prix Postponement