Saudi Arabia reduces government spending amid looming crisis
Saudi Arabia reduces government spending amid looming crisis

It appears that Saudi Arabia, one of the richest countries in the world and the largest oil producer, is running out of money. Recently, the government has started revising its budget spending. "We are facing a crisis the world has never seen the likes of in modern history," Mohammed al-Jadaan, the country’s finance minister said. He added that government spending would be cut "very deeply." Saudi Arabia announced on Monday new measures to shore up state finances and mitigate the crisis sparked off by low oil prices and the coronavirus. The country will reduce expenditure by 100 billion riyals ($26.6 billion). The Saudi authorities have already canceled and put on hold some operating and capital expenditures for some government agencies. Saudi citizens will also lose a bonus cost-of-living allowance. "Cost of living allowance will be suspended as of June first, and the value added tax will be increased to 15% from 5% as of July first," Mohammed al-Jadaan stressed. In addition, the government reduced the credits planned for a number of state initiatives, including the Vision 2030 project. "When the kingdom last stared down the crash in crude, it wielded reserves that peaked at over $375 billion in 2014. The stockpile was down by over a third just three years later, channeled almost entirely toward deficit spending" Al Jazeera, an independent news agency, pinpointed.

Published: 2020-05-22 07:02:59 UTC
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