Saudi Arabia announces record $98 billion deficit in 2015

OPEC kingpin Saudi Arabia posted a record $98 billion budget deficit in 2015 due to the sharp fall in oil prices, the finance ministry said on Monday.

Revenues were estimated at 608 billion riyals ($162 billion), well below projections and 2014 income, while spending came in at 975 billion riyals ($260 billion), ministry officials announced at a press conference in Riyadh.

The budget deficit is the highest in the history of Saudi Arabia, the world’s largest oil exporter, but was not as big as some expected.

The International Monetary Fund had projected the 2015 deficit to be around $130 billion and other reports also put it above $100 billion.

It was the second deficit year in a row for Saudi Arabia.

Riyadh projected a deficit of $87 billion as it issued its 2016 budget on Monday, the kingdom’s third annual shortfall in a row due to the oil price slump.

Revenues are projected at 513.8 billion riyals ($137 billion), the lowest since 2009, according to a statement posted on the finance ministry website.

The kingdom, the world’s largest oil exporter, is projecting spending next year at 840 billion riyals ($224 billion), the statement said.

The kingdom has seen a sharp drop in revenues as oil prices have fallen by more than 60 percent since mid-2014 to below $40 a barrel.

Public revenues are the lowest since 2009, when oil prices dived as a result of the global financial crisis.

Income for 2015 was 15 percent lower than projections and 42 percent less than in 2014.

Oil income has normally contributed around 90 percent of total revenues.

Riyadh maintained high spending this year, and launched an expensive military intervention in Yemen, by tapping into the huge fiscal reserves it accumulated when oil prices were high.