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IPFS News Link • Saudi Arabia

Saudi Arabia's worst financial crisis in decades threatens prince's ambitions

•, Kareem Fahim

And so did Paul Andrew, a display designer in a shoe store, whose financial woes have left him wondering whether it was time to return home to the Philippines. He did not make much even before his salary was cut by 40%, he said. "It is not enough."

Twin calamities - the coronavirus outbreak and plummeting oil prices - have saddled Saudi Arabia with its worst financial crisis in decades. It has spread unaccustomed pain across the kingdom, including among the private-sector workers and business owners who are central to Crown Prince Mohammed bin Salman's ambitions to steer the economy away from dependence on oil.

A widening budget deficit has left the government with the difficult task of trying to scare up revenue, curb spending and provide financial support to Saudis who have been shut in or locked down for months. Painful austerity measures imposed by the government earlier this week, including a tripling of the value-added tax, were a jarring blow to the generous welfare state, threatening greater hardship and possibly wider discontent.