Saudi Arabia Finance Minister Ibrahim Alassaf has announced the government’s decision to cut “unnecessary” expenses, including some current projects, to compensate for low oil prices, in an interview with CNBC Arabia in Washington D.C.
Alassaf said: “There are some projects like the ones that have been approved a few years ago and haven’t been carried out until now – that means such projects are not currently necessary and can be delayed.”
Though the minister urged that projects that are vital to Saudi’s future economy such as infrastructure, healthcare and education projects would not be affected by this move.
The government decisions are vital as cheap oil drastically affects the country’s revenues. The oil plunge in the world’s top oil exporting country started in 2014, has been taken seriously by local policymakers taking measure to be well-prepared.
Reuters reported that according to International Monetary Fund and private analysts, Saudi Arabia will hit a budget deficit of $120bn or more this year because of cheap oil. However, with financial reserves over $600bn, it is not in any particular danger in the short-term.
Alassaf was visiting the US capital along with other King Salman bin Abdulaziz Al Saud, King of Saudi Arabia, and other delegates to attend the 2015 Saudi-US Investment Forum on September 4. The event aimed to highlight many opportunities that are open for Saudi and American business ventures.
The full story behind the GCC’s potential funding crisis can be read in the September issue of Construction Business News ME.
(Image courtesy of Saudi Arabia’s Ministry of Finance official website)
