Saudi can adjust spending if crisis worsens - minister

FLEXIBLE FUNDS: Saudi has the means to adjust its budget if the economy falters. (Getty Images)

Saudi Arabia is able to adjust public spending should the economic situation worsen, although the economy was performing relatively well for now, its finance minister said in remarks carried on Wednesday.

"We expect our economy to continue its relative good performance compared with many global economies," Ibrahim Al Assaf was quoted as saying by pan-Arab daily Asharq Al Awsat.

"We have not noticed any worrying signs and if God forbid circumstances were to change negatively we have the flexibility to amend (the budget) and the capability for that," Assaf said.

Assaf was responding to a question about how Saudi Arabia would address a higher-than-expected budget deficit if oil prices continue to fall.

The world's top oil exporter has pledged to keep public spending high this year to support a series of major infrastructure projects, even as it expects to post its first budget deficit since an oil price rally began in 2002.

A near $100 slump in oil prices since last July and the deepening global financial crisis have brought to an end an economic boom in the Gulf Arab region.

Saudi Arabia's economy is likely to grow only 0.3 percent this year, compared with 4.2 percent in 2008, a Reuters poll showed last month.

Five of 14 respondents said the Saudi economy could contract in real terms. (Reuters)

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