The Saudi Arabian government may be planning to cancel $20 billion worth of projects as it attempts to rein in its budget deficit, sources told Bloomberg on Tuesday.
Saudi’s budget deficit currently stands at 16 percent of GDP, a hefty figure when compared to the UK at just 4.4 percent and the US at 2.5 percent. The country, who are the world’s biggest exporter of oil, has been hit by falling oil prices and market oversupply over the last year. This has lead them to consider reviewing thousands of projects currently under development and may cancel a third of them, according to Bloomberg’s sources.
Saudi’s Prince Mohammed is currently overseeing plans to reduce the country’s reliance on oil, as well as reorganise government departments to ensure infrastructure projects are completed within their budget. However, ministry budgets may be subject to cuts in the upcoming weeks as deficit is brought under control.