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Saudi Arabia could see deficit in FY15 budget – analysts

Saudi Arabia could see deficit in FY15 budget – analysts
By Mohammed Idris, Sultan Al-Raddad, Asil bin Talib
Riyadh-Mubasher: Saudis are awaiting the government to release 2015 controversial budget within the next 24 hours.
Saudis hope FY2015 budget to remain at last year’s levels after the steep decline in oil prices over the last three months.
FY2015 budget is likely to reflect deficit because of falling oil prices, according to analysts polled by Mubasher.
However, they expect the Kingdom to raise debt instead of using its reserves in order to cover deficit.
Economist Fadel Al Buainain said Minister of Finance Ibrahim Al Assaf earlier said the budget will not be impacted by falling oil prices, thus the expenditures are projected not to be less than SAR 855 billion.
Al Buainain forecasted a sharp decline in revenues, because of almost 50% drop in oil prices. “Even if the Kingdom maintains the public spending, I believe it will have to finance the potential deficit from general reserve or surplus transfer,” the expert said. He noted that the revenues may be less than SAR 700 billion.
Mazen Alsudairi, head of research at Al-Istithmar Capita, expected the revenues to reach SAR 2.40 trillion, and the expenditures to hit SAR 2.80 trillion, with a deficit of SAR 40 billion.
Economist Mohammed Al-Alangri said the public expenditures will exceed SAR 850 billion, adding that the public debt relies on the applicable monetary policy.

Translated by Abdul Maguid Aboshahla
Photo Credit: Arabianeye-Reuters