Saudi Arabia to slash capital spending by 71%

57fcf76bc46188750b8b462a

https://www.rt.com/business/362382-saudi-capital-spending-fall/

With the largest budget shortfall among the world’s 20 biggest economies, Saudi Arabia is planning more austerity measures this year. The kingdom will scrap projects worth more than $20 billion as it comes to terms with cheaper oil.

According to the Saudi government’s bond prospectus obtained by Bloomberg, capital expenditure is expected to fall to $20.6 billion (75.8 billion riyals) this year compared with $70.2 billion (263.7 billion riyals) in 2015. Two years ago, the country’s capital spending was $98.6 billion (370 billion riyals).

“I would’ve liked to have seen more cuts to current spending rather than focusing almost entirely on capital expenditure,” said Khatija Haque, head of Middle East and North Africa research at Emirates NBD. She added “in the short-term, the impact will be slower growth”as government spending and investment is reduced.

Saudi officials have suspended bonuses and reduced allowances for government employees, and a 20 percent cut to ministers’ salaries. As a result of the cuts spending will decline to $155 billion (581.2 billion riyals) from $190 billion (714.4 billion riyals).

The kingdom’s growth will likely slow to 0.6 percent this year from 3.4 percent in 2015, according to HSBC Holdings.

———-

significant..

“With the largest budget shortfall among the world’s 20 biggest economies, Saudi Arabia is planning more austerity measures this year. The kingdom will scrap projects worth more than $20 billion as it comes to terms with cheaper oil.”

austerity..

“The kingdom’s growth will likely slow to 0.6 percent this year from 3.4 percent in 2015”

basically zero growth..

401

~ by seeker401 on October 13, 2016.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: