RIYADH, Dec 23: Despite the weakening oil markets, Saudi Arabia has unveiled its largest ever budget with a total outlay of SR475 billion ($126.7 billion), allocating more money for education and increasing public spending by 15.8pc (SR65 billion).

Revenues for the year are projected at SR410 billion, leaving a deficit of SR65 billion, the first in many years.

The budget allocates a record SR225 billion for new project, endeavouring to give a fillip to market sentiments and SR122 billion is slated for education, training and scholarship. The budget allocation for new projects in 2009 is 36 per cent more than the allocations made in 2008.

The Finance Ministry said Saudi Arabia was expecting to a record surplus of SR590 billion in 2008 with revenues projected at SR1.1 trillion and expenditures at SR510 billion.

The new projects that received budget allocations in 2009 include Princess Noura bint Abdul Rahman University, the largest women-only university in the world, and King Saud University for Health Sciences and their branches.

The new budget has also earmarked SR52 billion for health services and social development, SR49 billion for water, municipality, agriculture, industry and infrastructure, and SR19 billion for transport and communication.

Addressing the budget session of the cabinet, Finance Minister Ibrahim Al-Assaf said the kingdom’s gross domestic product (GDP) in 2008 was expected to grow 22 per cent to SR1.75 trillion in current prices and 4.2 per cent in stable prices. The oil sector was expected to grow 34.9 per cent and private sector by eight per cent in current prices.

Preliminary estimates indicate that the kingdom’s public debt will drop to around SR237 billion at the end of fiscal year 2008, which represents 13.5 per cent of projected GDP for 2008 compared with 18.7 per cent in 2007.

Under the new budget, 86 new hospitals with a total of 11,750 beds will be established while the Saudi Red Crescent Society would be transformed into an authority.