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Saudi Arabia ‘Vision 2030’ plan cut by $8bn – report

Saudi Arabia ‘Vision 2030’ plan cut by $8bn – report

Brent crude is currently trading at around $30 a barrel, about half the level it was when Saudi Arabia announced its budget in December

Saudi Arabian austerity measures included cutting SAR30bn ($8bn) from programmes and mega-projects under the kingdom’s plan to end its reliance on oil, Okaz newspaper reported.

Work will continue on Crown Prince Mohammed bin Salman’s blueprint, called “Vision 2030,” despite the spending reduction, the paper said on Tuesday, citing unidentified people familiar with the matter.

It didn’t clarify the total budget of the programmes, or the period over which the cuts would take place. Okaz also reported that the government won’t cut salaries of state employees, citing the same sources.

The government’s Center for International Communication didn’t respond to a request for comment.

Authorities on Monday announced a SAR100bn austerity programme as the world’s largest crude exporter copes with the impact of the oil-price rout and the coronavirus pandemic. As well as cutting capital and operational expenditures, the kingdom will triple its value-added tax to 15 per cent and cut a cost-of-living allowance paid to government workers.

Overall spending for 2020 will remain close to what was planned as money saved gets re-allocated to health care and aid for businesses, Finance Minister Mohammed Al-Jadaan said.

Despite significant efforts to reduce the country’s dependence on oil, the majority of state revenue still comes from crude sales. Brent crude is currently trading at around $30 a barrel, about half the level it was when Saudi Arabia announced its budget in December, stunting the government’s ability to spend on programmes and projects to diversify the economy.

Bloomberg reported in March that programmes under the transformation plan were likely to face deep budget cuts.

Officials had already begun a broad reassessment of “Vision 2030” before the latest crisis, looking to increase the efficiency of spending on the plan and boost lagging progress.

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