Saudi Arabia has ordered its ministries to reduce spending on contracts included in the 2016 state budget by at least 5 % to outbalance Kingdom’s declined revenues over global oil prices drop, informed Reuters. The measures were proposed by the Economy Ministry in attempt to rationalize spending and increase efficiency.
According to Arabian Oil and Gas, the austerity drive could further dampen economic growth, particularly in the energy and construction sectors.
The proposal was approved by the King. The ministries are to work out a reprioritization and revision plan of their contracts to achieve required savings, but it remains uncertain how negotiations with suppliers might proceed.
Saudi Arabia ran a budget deficit of nearly $100b last year and has been looking for ways to boost non-oil revenues.