Saudi Arabia's Finance Minister Mohammed al-Jadaan said he estimated the country's budget deficit to widen up to 9% by the end of the year. This is from an earlier projection of 6.4%, due to the fall of oil prices and the coronavirus outbreak.
Jadaan told a news conference broadcast on state television that the government has a contingency plan and flexibility through a mixture of spending cuts, borrowing and tapping of reserves.
"We have huge reserves and investments, but we don't want to liquidate any of these so we will borrow. I don't expect the deficit by the end of 2020 to exceed 7% to 9%," he said.
Jadaan said the government approved raising the debt ceiling to 50% of gross domestic product, from 30%, however. He also said he doesn't expect borrowing to exceed 50% until 2022.
"This year we don't expect borrowing to exceed 100 billion riyals ($26.6 billion) and it could be less," he added.
Jadaan stressed that the financial and economic situation is changing on daily basis. So measures to mitigate the impact of coronavirus on economic activities and private sector will be put into effect immediately.
