Saudi Arabia’s finance ministry is closing the national accounts one month earlier than usual this year, suggesting it is tightening its control over spending as low oil prices create a record state budget deficit.
The world’s top oil exporter is grappling with a budget deficit which economists estimate could total $120bn or more this year, and the finance ministry has taken other unusual steps recently to clamp down on excess spending.
In its latest step, a document sent by the ministry to government bodies this week and seen by Reuters instructs them to “bring forward the final date to make payments from budget allocations and other accounts for the current fiscal year”.
The new deadline to make payments is Nov. 15, the document says. In past years the deadline fell in mid-December; last year it was Dec. 18.
The document does not elaborate on the reasons for the change, or say how government bodies are expected to cope with the earlier deadline. Calls to the finance ministry seeking comment were not returned.
Earlier this month, the ministry told government bodies that if budget allocations were not fully spent on the projects for which they were originally earmarked, the remaining money must be sent back to the Treasury. Previously, government bodies were free to transfer money from one project to another as they wished.
Since August last year, the government has sold more than $80bn of foreign assets via the central bank.
Last month Finance Minister Ibrahim Alassaf said his ministry was “working on cutting unnecessary expenses.”
Many economists expect next year’s national budget to include spending reductions in some areas.