Saudi plans spending cuts, revenue push to shrink 2016 deficit

Saudi Arabia, its finances hit by low oil prices, announced plans to shrink a record state budget deficit with spending cuts and a drive to raise revenues from sources other than oil.

The government of the world’s top oil exporter ran a deficit of 367 billion riyals ($97.9 billion) in 2015, the Council of Economic and Development Affairs said on Monday.

Its 2016 budget plan aims to cut that to 326 billion riyals, reducing pressure on Riyadh to pay its bills by liquidating assets held abroad.

Next year’s budget projects spending of 840 billion riyals, down from 975 billion spent this year. The original budget plan for 2015 projected spending of 860 billion riyals.

Revenues next year are forecast at 514 billion riyals, down from revenues of 608 billion riyals in 2015. This year’s original budget plan envisaged 715 billion riyals of revenues.