Saudi Arabia to cut spending after oil price decline

Saudi Arabia will cut spending and delay some state projects after the recent decline in the price of oil, Finance Minister Ibrahim al-Assaf said.

Talking to broadcaster CNBC Arabia, he said the country was in a good position to manage low oil prices.

Saudi Arabia, the world’s largest oil exporting country, has maintained its production levels despite a collapse in the price of oil.

Oil is trading at less than $50 per barrel, half the price of a year ago.

“We have built reserves, cut public debt to near-zero levels and we are now working on cutting unnecessary expenses while focusing on main development projects and on building human resources in the kingdom,” he said in the interview.

Some areas of the economy will still receive investment, he said, as the country tries to improve industries outside energy.

“Projects in sectors such as education, health and infrastructure are not only important for the private sector but also for the long-term growth of the Saudi economy,” he said. He did not give details of where cuts would happen.

It may issue bonds, or Islamic bonds known as sukuk to finance some spending, he said.

The kingdom has more than $600bn in reserves it can draw upon should expenditure outstrip income from oil exports.