Saudi Arabia Cuts Government Budget: The kingdom...

Saudi Arabia Cuts Government Budget: The kingdom faces its worst cash-flow problem in decades. Weak oil prices and payments of $55 billion to the U.S.-led international alliance that defeated Iraq in the 1991 Persian Gulf War have pinched the kingdom’s purse. Saudi figures project the deficit for 1995 at $4 billion--62% less than last year’s shortfall of $10.6 billion. Expenditures were set at $40 billion, down from $42.6 billion last year. Revenue for the year was forecast at $36 billion. The kingdom has been covering recent deficits by borrowing, mainly on the domestic market. It has incurred a national debt believed to exceed $70 billion.