Saudi Arabia to push ahead with investments despite widening deficit

Riyadh

SAUDI authorities pledged to curb wages and push ahead with investments next year as the world's largest oil exporter seeks to counter the effect of tumbling crude prices on the economy.

The government said that it expects the budget deficit in 2015 to widen to 145 billion riyals (S$51 billion), from 54 billion riyals this year, the Finance Ministry said on Friday. That amounts to about 5 per cent of gross domestic product, according to Arqaam Capital, a Dubai-based investment bank.

The Finance Ministry said that the government will continue to invest in areas such as education and health care, while exerting "more efforts" to curb spending on wages and allowances, which make up about 50 per cent of spending. The kingdom will resort to borrowing and use of reserves to plug the budget deficit, the state-run Saudi Press Agency said, citing Economy Minister Mohammad Al…