Saudi Arabia is ordering a series of cost-cutting measures as the slide in oil prices weighs on the kingdom’s budget, according to two people familiar with the matter.
The finance ministry told government departments not to contract any new projects and to freeze appointments and promotions in the fourth quarter, the people said, asking not to be identified because the information isn’t public. It also banned buying vehicles or furniture, or agreeing any new property rentals and told officials to speed up the collection of oil revenue, they said.
With income from oil accounting for about 90 percent of revenue in the Arab world’s largest economy, a drop of more than 40 percent in crude prices in the past 12 months has put pressure on the nation’s finances. While Saudi Arabia’s public debt is one of the lowest in the world, with a gross debt-to-GDP ratio of less than 2 percent in 2014, the kingdom’s net foreign assets fell for a seventh month to the lowest level in more than two years in August.
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Saudi Arabia is OPEC’s biggest oil exporter. Brent, a benchmark for more than half the world’s crude, was trading at $51.47 per barrel at 12:08 p.m. in London, down 10 percent this year.
The finance ministry declined to comment on the circular. The government was working with advisers on a review of capital spending plans, people familiar with the matter said in August.