Saudi Arabia's King Salman approved raising the debt ceiling to 50% of gross domestic product, from 30%, said Mohammed Al-Jadaan, Minister of Finance, Economy and Planning in a press conference.
"We expect this 50% will not be increased until 2022," Al-Jadaan said, adding that the Saudi government will increase borrowing, expecting that debt will not exceed SAR 100 billion this year.
However, the Saudi government does not expect to tap more on reserves and has no plans to liquidate any of its investments.
"We are committed to pay the business owners' dues; the settlement period extends for less than 30 days until yesterday," he added.
The Saudi government took a number of precautionary measures to help combat the outbreak of the coronavirus, including cutting expenditure and increasing borrowing.
Al-Jaddan estimated deficit could widen to a maximum of 7% to 9% by the end of the year, from an earlier projection of 6.4%.
Cutting expenditure will be implemented in two phases, including some approved measures related to cutting budgets of entertainment, tourism, and sports in addition to measures to cut other unnecessary spending.
Saudi Arabia announced emergency stimulus measures on Friday that took its support for the economy to more than $32 billion as it tackles the coronavirus outbreak and lower oil prices, and said it is looking to borrow more to finance a widening deficit.
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