Riyadh is forced to take radical measures in trying to cope with the epidemic of coronavirus infection COVID-19, as well as its consequences in the global oil market.
On Monday, May 11, reports the British edition of The Guardian.
According to media reports, taxes on basic goods will triple – up to 15%. VAT will also rise from 5% to 15% in July. At the same time, the authorities will refuse the allowance for a living wage, which cost about 13.5 billion dollars a year. Also, spending on large state projects by $ 26 billion will be cut.
“We are facing a crisis that the world has never seen in modern history, a crisis marked by uncertainty,” commented on the situation, the Minister of Finance of the Kingdom, Acting Minister of Economics and Planning, Mohammed al-Jadaan.
The official admitted that the measures that the authorities are taking are tough, but necessary for the state.
To date, 39,000 coronavirus infected and 246 deaths have been reported in Saudi Arabia. However, a much more serious blow to the kingdom was the oil crisis provoked by the COVID-19 pandemic. A sharp drop in oil prices has reduced revenue in the Arabian budget.
The energy price has more than halved since the end of 2019. Now oil is trading at around $ 30 per barrel, which is much lower than the threshold acceptable for Riyadh. The kingdom also lost revenue from Muslim pilgrimages to the holy cities of Mecca and Medina, which were closed to visitors due to the virus.