Saudi Arabia’s 2017 state budget is “likely to show Riyadh has shrunk a huge deficit caused by cheap oil faster than expected, which may let it spend more to bolster a shaky economy” next year, according to a report in Reuters by reporters Marwa Rashad and Andrew Torchia.
After a tough year economically for the Kingdom, bankers and analysts in touch with Saudi economic officials said that “when Riyadh reveals next year’s budget in about two weeks, it will claim more progress in controlling its finances than many thought possible 12 months ago,” Reuters reports. “That may allow it to focus on another key reform plank: diversifying the economy beyond crude exports and fostering private sector growth.”
“Drastic spending cuts overseen by King Salman’s son, Deputy Crown Prince Mohammed bin Salman, appear to have cut the deficit significantly beyond the 326 billion riyals originally planned in the 2016 budget…Because the spending cuts have already been so drastic, further falls in the deficit may have to be slower. But the government may have created room for itself to loosen the purse strings slightly next year.”
