Saudi Arabia may borrow extra $26.6 bln amid low oil prices, coronavirus crisis

Saudi Arabia may borrow an additional 100 billion riyals ($26.6 billion) this year and the total debt could reach 220 billion riyals ($58.5 billion), said Minister of Finance, Acting Minister of Economy and Planning, Mohammed al-Jadaan on Wednesday.

The Kingdom will draw down no more than 110-120 billion riyals ($29.2-31.9 billion) from its reserves to finance a government deficit caused by oil price collapse and the coronavirus pandemic.

Al-Jadaan highlighted that the Kingdom has the financial ability to combat the coronavirus crisis and that the government is looking at additional measures to reduce spending amidst the coronavirus outbreak.

“The kingdom has the fiscal ability to overcome this crisis … we will get over this in a strong position, the kingdom has gone through and seen other, deeper crises in the past and survived them.”
“We are currently studying additional measures to reduce spending. Expenses related to travel, events and other activities as well as projects put on hold will lead to some savings,” Jadaan said.

Saudi Arabia has so far announced economic stimulus amounting to 177 billion riyals ($47 billion). That included 47 billion riyals ($12.5 billion) allocated to the healthcare sector and 130 billion riyals ($34.5 billion) allocated to support the private sector and individuals.

“The health of the private sector is our main concern, we will support it to get over this crisis,” said al-Jadaan.

He pointed out that the non-oil private sector is expected to contract this year for the first time.

Al-Jadaan said that the impact of the coronavirus pandemic on both oil and non-oil revenues will be very limited in the first quarter of the year.

He added that the government will announce additional measures to support the economy by the end of the coming June.