Saudi Arabia posts $8bn Q3 deficit as lower oil prices weigh

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Saudi Arabia logged a budget deficit of $8bn (SAR30bn) in the third quarter, a finance ministry statement showed on Monday, as lower oil prices weighed on revenue.

The kingdom’s total spending came to SAR339bn in the quarter as it continued to spend heavily on its Vision 2030 transformation programme aimed at diversifying the economy away from its huge reliance on the oil sector.

Total revenue, meanwhile, stood at SAR309bn in the third quarter, with oil revenue at SAR191bn and non-oil revenue at SAR118bn.

Saudi Arabia is “doubling down” on its multi-billion dollar economic overhaul, finance minister Mohammed Al Jadaan told an investor summit in Riyadh last week.

While it has accelerated efforts to bolster non-oil growth, oil is still an economic mainstay. However, amid lower oil prices and output, government earnings have fallen.

The kingdom is reviewing spending, under which some Vision 2030 projects will be delayed or scaled back and others prioritised.

A Reuters poll expects the Saudi economy to grow 1.3 per cent this year, slightly less than the International Monetary Fund’s recently revised projection of 1.5 per cent, and among the slowest in the Gulf Cooperation Council bloc.

Oil output is expected to rise next year, driving a rebound in overall economic growth. The non-oil sector now makes up more than 50 per cent of GDP, and while there has been some softening there this year, it is still estimated at around 4 per cent.

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