RIYADH – Saudi Arabia’s national budget deficit in the first quarter of this year reached 34.107 billion Saudi riyals (a bit over 9 billion US dollars) amid oil price collapse and a significant drop in demand in the wake of the coronavirus lockdown, the finance ministry announced.
“The total revenue for the first quarter amounts to 192.072 billion riyals (51.1 billion dollars), which has decreased by 22 percent compared to the same period of the last year,” the finance ministry said in a statement on Wednesday, Xinhua reported.
Oil revenues dropped 24 percent to 128.771 billion riyals (35 billion dollars) in the first quarter, while non-oil revenue decreased by 17 percent to 63.3 billion riyals (17 billion dollars). During the same quarter of 2019, the Saudi national budget saw a surplus of 27.8 billion riyals (7.5 billion dollars) with the revenue standing at 245.41 billion riyals (66.3 billion dollars).
Finance Minister Mohammed al-Jadaan stated last week that the government expected the COVID-19 crisis to last for several more months but that it would have a “limited impact on its first-quarter revenue”. Saudi Arabia has projected a deficit of 187 billion riyals (50 billion dollars), or 6.4 percent of the gross domestic product, this year.
The Wahhabi kingdom, best-known (or better said, infamous) for its support for Islamic terrorism worldwide, failed to come to an agreement with Russia on a reduction of oil production. In addition, Saudi Arabia even further increased its oil production, causing a further downward spiral in oil prices.
It is presumed by most geopolitical analysts that the move was supposed to be a form of pressure on Russia to accept a new oil agreement that would’ve been more beneficial to Saudi Arabia. Yet, by doing so, Saudis miscalculated Russia’s strength. Based on earlier myths of Russia’s overreliance on oil prices for its economic growth, Saudi actions, aimed at weakening Russia, only ended up hurting its own economy.