Saudi Arabia posts record $138 billion deficit in 2015, projects 2016 deficit of $122 billion: Ministry

Traffic passes the Kingdom Tower, on King Fahad Road in Riyadh, Saudi Arabia.
Traffic passes the Kingdom Tower, on King Fahad Road in Riyadh, Saudi Arabia. PHOTO: BLOOMBERG

RIYADH (AFP) - Opec kingpin Saudi Arabia posted a record US$98 billion (S$138 billion) Budget deficit in 2015 due to the sharp fall in oil prices, the Finance Ministry said on Monday (Dec 28).

The kingdom also projected a deficit of US$87 billion (S$122 billion) as it issued its 2016 Budget on Monday, the kingdom's third annual shortfall in a row due to the oil price slump.

Revenues were estimated at 608 billion riyals (S$228 billion), well below projections and 2014 income, while spending came in at 975 billion riyals, ministry officials announced at a press conference in Riyadh.

Revenues are projected at 513.8 billion riyals, the lowest since 2009, according to a statement posted on the ministry website.

The kingdom, the world's largest oil exporter, is projecting spending next year at 840 billion riyals, the statement said.

The Budget deficit is the highest in the history of Saudi Arabia, the world's largest oil exporter, but was not as big as some expected.

The International Monetary Fund had projected the 2015 deficit to be around US$130 billion and other reports also put it above US$100 billion.

It was the second deficit year in a row for Saudi Arabia.

The kingdom has seen a sharp drop in revenues as oil prices have fallen by more than 60 percent since mid-2014 to below US$40 a barrel.

Public revenues are the lowest since 2009, when oil prices dived as a result of the global financial crisis.

Income for 2015 was 15 per cent lower than projections and 42 per cent less than in 2014.

Oil income has normally contributed around 90 per cent of total revenues.

Riyadh maintained high spending this year, and launched an expensive military intervention in Yemen, by tapping into the huge fiscal reserves it accumulated when oil prices were high.

The kingdom said on Monday that it plans to review the prices of heavily subsidised power and fuel as part of new measures introduced in the face of low oil prices.

Its finance ministry also said it is considering plans to raise charges on public services and apply value-added tax (VAT) in cooperation with other Gulf Arab nations.