Saudi Arabia is planning to further shrink its defense budget for the upcoming year.
This week, Saudi Arabia unveiled its plan for the budget in 2020. Overall, the government is expecting to spend about SAR1.02 trillion ($272 billion) during the year. Total revenue will amount to SAR833 billion, leaving a deficit of around SAR187 billion.
In a document released by the Ministry of Finance, the government said that, for the military sector, Saudi Arabia will spend SAR182 billion ($48.5 billion) on defense matters in 2020. This represents a cut of about 4.7 percent from the approved budget for 2019.
Saudi Arabia has the largest defense budget in the Middle East. However, the government has cut its defense spending nearly every year since King Salman bin Abdulaziz al-Saud took over in 2015. The Saudi budget has been under downward pressure from declining energy prices. The sale of oil makes up most of the budget revenue.
The Vision 2030 economic plan aims to reduce the Saudi economy’s reliance on energy exports. To help finance some of its goals, Saudi Arabia’s oil company, Aramco, has sold stock to investors in an initial public offering this month.