After three years of record budgets to spur growth, Saudi Arabia said Monday it plans to scale back government spending through 2022, forecasting lower oil revenues and a lesser reliance on its lifeblood industry as its ambitious economic reforms take hold.
The Middle East's largest economy and the world's largest crude exporter plans to spend Riyal 1.02 trillion (US$272 billion) in 2020, down 2.6% from 2019, according to its budget statement. Government expenditures will fall further to Riyal 990 billion in 2021 and Riyal 955 billion in 2022, it added, as the kingdom expects its initiatives to diversify its economy away from oil and foster new industries to begin to bear fruit.
Crude oil production cuts implemented by OPEC, largely at the behest of Saudi Arabia, will weigh on 2020 revenues, which are expected to fall 14.8% from 2019 levels to Riyal 513 billion, the kingdom said.
The budget deficit will widen to 6.4% in 2020 from 4.7% in 2019 as the government earns less from oil.