RIYADH, Dec 22: The Saudi government said on Monday that it will spend more than it earns next year, despite cutting back its plans, as plummeting oil prices are likely to carve a big chunk out of revenues.

The oil-rich kingdom vowed to maintain spending on major projects, as the first budget deficit since 2002 follows a record year in 2008, when a leap in oil prices produced a budget surplus double the projected level.

“In spite of the decline in oil price during the last part of 2008, this year’s budget will continue to focus on optimising the use of available resources,” the ministry of finance said in its budget statement.

The crash in the oil prices to $40-$45 a barrel from a July peak above $147 has raised questions over whether the world’s largest oil exporter can sustain hundreds of billions of dollars worth of ambitious mega-projects announced over the past three years.—AFP