Saudi Arabia will need to take “painful” measures and look for deep spending cuts as the kingdom faces a double crisis caused by the coronavirus pandemic and the meltdown in global oil markets, its finance minister said on Saturday.
“The kingdom hasn’t witnessed a crisis of this severity over the past decades,” Mohammed Al-Jadaan said in an interview with Saudi television station Al-Arabiya. “It’s very important that we take very tough and strong measures, and they might be painful, but they’re necessary.”
Already under a strict curfew to contain the spread of the coronavirus pandemic, the world’s largest oil exporter is bracing for a second impact from the oil price rout and production cuts negotiated by OPEC and its allies. The price of Brent crude crashed by more than 50% in March, contributing to a record $27 billion monthly drop in the Saudi central bank’s net foreign assets.
State oil revenue has decreased by more than half, and non-oil revenue will decrease as well, he said.
Meanwhile, Saudi Arabia will isolate an industrial area of the eastern city of Dammam from Sunday, preventing entry and exit until further notice, to curb the spread of the new coronavirus, state news agency SPA reported.
Freight shipments will be able to come and go from the area, Dammam Second Industrial City, SPA said, citing an interior ministry official. The decision allows vital factories to operate at one third capacity, SPA added.
