The Saudi government has announced a cut of 50 billion Saudi riyals ($13.2 billion) to its 2020 state budget, following an unprecedented sharp plunge in oil prices.
Finance and Economy Minister Mohammed Al-Jadaan announced that this decision comes in light of the drop in oil prices and the effect of the coronavirus on the global economy.
In statements quoted by the Saudi press agency, SPA, Al-Jadaan added that this decision will be followed by other actions, such as: "Taking measures and mechanisms to face any emergency situation with a high level of efficiency."
The budget reduction is equal to around five per cent of the kingdom's budget approved for the year of 2020, which amounted to 1,020 billion Saudi riyals ($271 billion).
In light of the crisis caused by the coronavirus, including a suspension of maritime navigation and the closure of sea and air outlets, Brent Crude oil prices are projected to fall to an average of $43 a barrel in 2020, compared with $64 a barrel in 2019 – the largest decline in nearly 30 years.
Saudi Arabia has been significantly affected over the past weeks, after Moscow rejected its request to reduce oil production to preserve prices.
Saudi Arabia and Russia have been fighting over oil market share after their three-year agreement to hold back production collapsed this month.