With government revenues ravaged by the collapse in oil prices, Saudi Arabia’s budget deficit over the first six months of 2020 exceeded the entire annual deficit for 2019. Coming in at $38.2bn (almost all in Q2), the first half deficit is swiftly catching up the originally-budgeted 2020 deficit of $49.9bn and it seems a near-certainty that this will be comfortably overhauled this quarter. This year’s deficit could yet hit $100bn for the first time since 2015.
The deficit is being pushed out by a combination of the sharp financial downturn and the government’s multi-billion dollar economic rescue package (MEES, 17 April). The government has scrambled to fill the resultant hole in its finances and debt levels have jumped as a result. Having ended 2019 at $181bn, debt now stands at $219bn and is likely to balloon further (see chart 1). (CONTINUED - 808 WORDS)