Saudi Arabia announces spending cuts in 2021 budget to reduce widening deficit

Executive Summary

• Saudi Arabia has planned spending cuts of 7% in its 2021 budget in an attempt to reduce its spiralling deficit. Spending for 2021 is projected to be USD 264 billion while revenue is projected to be USD 227 billion indicating a budget deficit of USD 37 billion or 4.9% of GDP.
• This figure is an improvement from a projected deficit of USD 79 billion this year, or 12% of GDP as the economy suffered from the double whammy of falling oil revenues and the coronavirus pandemic induced economic contraction.