A sharp fall in oil price has forced Saudi Arabia’s government to deliver the largest budget deficit in its history.
In the wake of declining oil prices and a war with Yemen which increase the government spending, the country’s deficit rose to 367bn riyals (£66bn). The total deficit stood at 16pc of the economy’s size. Stock markets reacted positively to the government’s spending plans, and investors are feared.
The Saudi government has planned to narrow the deficit to 327bn riyals in 2016, by cutting back spending from 975bn riyals to 840bn riyals.