Economics
Saudi Arabia Plans Spending Cuts in 2021 as Economy Recovers
- Wealth funds will make up for some cuts with local investment
- Saudi economy faces twin challenges from oil market, Covid-19
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Saudi Arabia said its spending plans for next year would be expansionary, as it leans more heavily on government-controlled funds to make up for cuts to a finance ministry budget battered by a decline in oil prices and the coronavirus pandemic.
The kingdom will stick to its plan to cut spending by 7.3% in 2021 after its deficit widened dramatically this year, according to an annual budget statement released Tuesday. Spending is projected at 990 billion riyals ($264 billion). Revenue is expected to rise to 849 billion riyals. The budget deficit is expected to narrow to 141 billion riyals, or 4.9% of economic output, compared to nearly 300 billion riyals, or 12% of gross domestic product, this year.