Saudi Arabia implements unprecedented austerity measures

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The Saudi kingdom, the world's leading exporter of crude oil, is facing a sharp drop in world demand for black gold linked to the coronavirus crisis and a drop in crude oil prices. He therefore decided to triple the rate of his value added tax (VAT) and suspend the payment of a monthly bonus to civil servants.

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One of the flagship measures of the austerity plan announced by Saudi Arabia is the tripling of VAT. The value added tax goes from 5 to 15% from July 1st. The government has also decided to suspend the payment of a monthly bonus to public servants, which could cause public dissatisfaction.

This aid of nearly 246 euros was implemented in 2018 to compensate for the increase in gas prices and the introduction of VAT in the country. Furthermore, the Saudi authorities have decided to cancel or in certain cases freeze investments intended for major economic development projects. These projects were designed to modernize the economy and make it less dependent on oil rent . 

Saudi Arabia, the world's leading oil exporter, is facing a fall in budget revenue due to the fall in oil prices and the slowdown in world activity due to the coronavirus. Oil revenues, which account for 70% of the country's revenue, plunged 24% in the first quarter ...

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• Saudi Arabia
• Oil
• consumption
• Coronavirus