Saudi Arabia is trimming government spending next year to help shrink its growing debt and cope with low oil prices.
According to Al Arabiya, the oil rich kingdom expects to run an $87 billion deficit in 2016, down from about $97.9 billion this year.
Saudi Arabia expects to spend about $224 billion, or 840 billion riyals, next year, down from the $260 billion spent in 2015.
According to the country’s Ministry of Finance, oil revenues are expected to hit about $118 billion for 2015, accounting for 73 percent of the government’s revenues but down 23 percent from 2014.
Government revenues are expected to dip to $137 billion next year from $162 billion in 2015, Al Arabiya said.
According to data from the Central Department of Statistics and Information included in the budget, the oil sector is projected to decline by 42.78 percent in current prices.
The kingdom’s 2016 budget also includes a $48 billion, or 183 billion riyals, budget support provision to offer increased capital and operating expenditure flexibility tied to “recent excessive volatility of oil prices.”
Dr. Fahd bin Jumaa, vice president of the economy and energy committee of the Shura Council, told Al Arabiya that the budget assumed a crude price of $45 per barrel.
Brent crude was trading at $37.69 per barrel around noon on Tuesday, down from over $100 per barrel in 2014.
Saudi Arabia has been pumping record amounts of crude this year, even as global supplies swelled past historic highs.
According to Platts, Saudi Arabia pumped well over 10 million barrels per day in November, a production level it has exceeded since March.
Earlier this month, OPEC effectively removed its production ceiling after the group’s members consistently blew past its 30 million barrel per day target this year.
OPEC expects demand for its crude to average 30.84 million bpd in 2016, “which is significantly below current production levels — whether or not Kurdish oil is included in the estimate for Iraq,” Platts added.