Saudi Arabia is “assessing all the options” to boost its economy after taking painful measures to offset a sharp decline in oil revenue and deep economic contraction caused by restrictions to halt the spread of the coronavirus, the kingdom’s commerce minister said.
“The impact of oil prices has affected Saudi Arabia’s revenue and like any other country we have to adjust,” Commerce Minister Majid Al-Qasabi told Bloomberg TV in an interview that will be aired on Thursday. “The government is in continuous review of what is best for the people and the nation and its interests.”
An almost 40% drop in Brent crude prices over the past year, combined with production cuts to drain a supply glut, helped push Saudi Arabia’s oil revenue down by 45% in the second quarter from a year earlier. In response, the government embarked on a range of austerity measures, cutting investment spending while also increasing taxes and slashing payouts to poorer families.
But the impact on citizens income has irked many. A recent broadcast of an interview with Finance Minister Mohammed Al-Jadaan was bombarded with questions about the possibility of lowering VAT, which was introduced for the first time in 2018 and tripled to 15% this year, even though it was pre-recorded.
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