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Sun 11 Oct 2015 11:43 AM

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Freeze on new projects, promotions, as Saudi orders cutbacks for Q4

Finance ministry clamps down on new furniture, cars and property rentals at all gov’t departments

Freeze on new projects, promotions, as Saudi orders cutbacks for Q4
Saudi Arabias Finance Minister Ibrahim Abdulaziz Al-Assaf (Getty Images)

Saudi Arabia’s finance ministry has clamped down on costs as the kingdom seeks to shore up its budget due to the continued slump in the oil price according to a report from Bloomberg.

The news agency quoted two sources as saying that the ministry had “told government departments not to contract any new projects and to freeze appointments and promotions in the fourth quarter.”

The report also said that the ministry had banned the “buying of vehicles or furniture, or agreeing any new property rentals and told officials to speed up the collection of revenue”.

Saudi Arabia is facing a budget deficit this year of up to 20 percent of GDP, according to projections from the International Monetary Fund (IMF). The IMF estimates that the kingdom’s public debt-to-GDP ratio could rise from less than 2 percent in 2014 to 33 percent in 2020.

In August, the Financial Times reported that the kingdom plans to issue as much as $27 billion in bonds in the last five months of the year, a major indicator of the effect the low oil price is having on the Arab world’s largest economy.

From a high of around $737 billion last year, the Gulf state now has $655 billion held in foreign exchange reserves, as of August.

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