Saudi Arabia: 9 billion dollar budget deficit due to pandemic

(Patria) – Foreign reserves of the Central Bank of Saudi Arabia experienced the fastest decline in the last 20 years in March, reaching the lowest level since 2011.

In addition, the kingdom's budget already faced a deficit of 9 billion dollars in the first quarter due to a drop in oil export revenues.   

The largest oil exporter is suffering enormous damage due to the drop in 'black gold' prices, which history has almost never recorded, while at the same time fighting the coronavirus epidemic, which has significantly slowed down or even halted the economic reforms introduced by Prince Mohammed bin Salman.

Net foreign assets fell to 464 billion dollars, which is considered the lowest level in the last 20 years.

Due to a financial loss of almost 27 billion dollars – the largest monthly drop in the last two decades, Saudi Arabia will likely have to resort to reserves to repair the damage caused to the economy by the fall in oil prices, as well as the overall stagnation in other sectors.

Saudi Arabia, which has registered more than 20,000 cases of coronavirus infections and 152 deaths, had forecast an annual budget deficit of 50 billion dollars, or 6.4% of GDP, for the current year before the pandemic, which is significantly higher than the 35 billion dollars deficit last year.