Saudi budget deficit to grow by $50 billion next year

Saudi Arabia's budget deficit is likely to rise by $50 billion in 2020 as it faces tumbling oil prices and production cuts, it was reported on Monday.

Riyadh projected a budget deficit of $50 billion for 2020, for the seventh year in a row, up $15 billion on this year, according to an official statement.

The statement was released on state TV following a cabinet meeting chaired by a frail King Salman said Riyadh would also cut spending for the following year, in a rare belt-tightening measure.

Spending was projected at $272 billion, down 7.8 percent on 2019 estimates while revenues were estimated at $222 billion, also lower by 14.6 percent.

Oil prices have remained slow, despite additional production cuts agreed by OPEC and its allies last week.

Oil income contributes to more than two-thirds of Saudi public revenues. Riyadh has also committed to larger production cuts to support prices.

The finance ministry later said that actual spending in 2019 came at $279.5 billion and revenues at $244.5 billion, leaving the same projected shortfall of $35 billion.

Saudi Arabia has posted a budget deficit each year since 2014 when oil prices crashed.

Despite the deficit, Riyadh continues to be defiant that its ambitious Vision 2030 is carrying on.

Many of the bold plans pegged to Vision 2030 - such as futuristic mega-city NEOM - are yet to be realised, women's rights reforms instigated over the past two years are also part of the plan.

Reforms including allowing women the right to drive and loosening travel restrictions have been slammed by human rights organisations who say the measures are hollow and have come at the expense of a widespread crackdown on dissent throughout the kingdom. 

Mohammed bin Salman has been under increased international scrutiny since the brutal murder of journalist Jamal Khashoggi at the Saudi consulate in Istanbul last year.

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