Beacon Examiner -1 January 2016 – Saudi Arabia’s government ran a record budget deficit of SAR 367 billion (USD97.9 billion) in 2015 because of low oil prices, Council of Economic and Development Affairs said.
The central bank acts as Saudi Arabia’s sovereign wealth fund and has born the brunt of financing the deficit, which totalled SR367 billion this year, according to a Finance Ministry statement on Monday.
Jadwa also noted that the oil price used to calculate Saudi Arabia’s oil income in 2016 will be set at Dollars 40.3 a barrel, down from USD 64.8 a barrel this year.
Saudi Arabia is counting the cost of a policy of allowing the oil price to drop as it seeks to drive less competitive producers such as United States shale oil fields out of business.
Spending on military and security projects reached 20 billion riyals in 2015, Saudi Arabia said, following its intervention in Yemen as well as action against militant group Islamic State.
For the year, the finance ministry said gross domestic product was expected to increase by 3.4 percent, and the oil sector is expected to grow by 3.06 percent.