Saudi Arabia, the world's biggest oil exporter, has paid the majority of 525 billion riyals worth of invoices from the private sector received within 60 days of receipt, as the kingdom seeks to settle its dues that have caused mayhem for contractors.
The kingdom's ministry of finance said that a total of 345,000 invoices relating to work for 450 government entities were paid up to the middle of September as part of the 2017 fiscal year, the state-run Saudi Press Agency reported. Ninety-eight per cent of all invoices representing 92 per cent of total dues were paid within 45 days. Only 2 per cent of the number of invoices took longer than 60 days to pay.
Saudi Arabia is seeking to settle outstanding payments to contractors after delays caused financial strain for companies, including construction groups Saudi bin Laden and Saudi Oger.
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The kingdom began tightening its purse strings in 2016 to help bring down the fiscal deficit which reached a record 367bn riyals in 2015 because of plunging oil prices.
Saudi Arabia expects to narrow its budget this year to 198bn this year, which is 7.7 per cent of GDP (in fixed prices) and down by 33 per cent year-on-year from 297bn in 2016.
The government is slightly loosening its purse strings this year, after the fiscal deficit in the first quarter of this year fell 71 per cent year-on-year to 26bn riyals.
Saudi Arabia has also been active on the debt front, issuing riyal-denominated sukuk under a new program, international islamic bonds and a conventional bond.
The government raised this week $12.5 billion in bonds, following on last year's $17.5 issue which was the biggest by an emerging-market nation. It also tapped the Islamic bond market in April, issuing $9bn worth of sukuk, its first international Islamic bond.
It also sold 37bn riyals worth of domestic sukuk since it launched a new programme in July launched to help plug the fiscal deficit.
