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Saudi Arabia hits record $98B deficit

Saudi Arabia hits record $98B deficit

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Date: 29 December 2015 06:32

Despite a record deficit and falling oil prices creating a drastic impact on the world’s leading crude exporter, Saudi Arabia continues to spend heavily on military operations in Yemen, Sputnik reported.

Since 2014, global oil prices have declined sharply. Falling by over 60%, a barrel of crude currently sells for less than $50, and those figures have had a drastic impact on the Saudi Arabian economy, which relies on oil for roughly 90% of its revenue.

On Monday, the kingdom’s finance ministry posted a budget deficit of $98 billion for 2015, the highest in the 83-year-old nation’s history. Total revenue was estimated at $162 billion, and that income for 2015 was 15% lower than projected.

The country’s Income fell a full 42% from the previous year.

The ministry doesn’t foresee a recovery any time soon. Projections show an $87 billion deficit for next year.

As Riyadh suffers economic difficulties, it may have its own policies to blame. In an effort to put competing oil producers out of business – as well as US shale-oil extraction companies — Saudi Arabia and other OPEC nations have increased production. That increased supply has driven down demand and, consequently, prices.

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