RIYADH, Saudi Arabia (AP) — Saudi Arabia announced its 2017 budget on Thursday, projecting an increase in spending and a lower budget deficit as the Saudi king acknowledged "very turbulent economic conditions."
The oil-rich kingdom said that its spending is expected to reach 890 billion riyals ($237 billion) with revenues of $184 billion. The budget deficit will reach 8 percent of gross domestic product or 198 billion riyals ($52.7 billion) a decline compared to the 2016 deficit, which reached 297 billion riyals ($79 billion).
"Our economy is strong; we have enough strength to confront the economic challenges," King Salman said in front of his Cabinet on Thursday. The announcement, he said, comes amid "very turbulent economic conditions which many countries suffered from."
Last year, the kingdom cut back on spending due to sliding oil prices, the main economic engine for the kingdom. Prices now sit at around $55 per barrel after crashing to a 13-year low in February.
Khaled al-Faleh, the Saudi oil minister, said that there will be a gradual lifting of fuel subsidies which will be replaced by cash handouts to citizens.
The kingdom is pushing for a diversification of its income sources and a decreased dependency on oil.
The government appeared to be cutting slightly on defense spending, where it allocated 190.8 billion riyals or $50.8 billion for 2017 — down about $3.8 billion from last year.
Saudi Arabia has been leading a military coalition battling Shiite rebels in Yemen since March last year and is a member of the U.S.-led coalition battling the Islamic State group in Syria and Iraq.