According to a cabinet statement, the shortfall was predicated in the 2017 state budget released on Thursday.

Next year, Saudi expenses will reach $237 billion against revenues of $184 billion, the statement read.

It further noted that the 2016 deficit will stand at $79 billion, down 8.9 percent from an earlier estimate.

“This budget comes at a time of a highly volatile economic situation ... which led to a slowdown in world economic growth and a drop in oil prices that impacted our country,” Saudi King Salman bin Abdulaziz Al Saud told on official television at a cabinet meeting.

Earlier this month, King Salman acknowledged that some of the economic measures adopted by the government are “painful,” but they are needed to avert more complicated financial woes.

The finances of Saudi Arabia, the world’s second largest crude producer after Russia and largest oil exporter, have been hit by a downturn in oil prices that were above $100 a barrel in 2014, but sank below $40 two years later. The prices, however, recovered toward the end of 2016 and traded below $55 on Thursday.

The plunge in global oil prices prompted Riyadh to rein in public spending in a bid to save money. The kingdom’s economic measures are being led by Salman's son, Deputy Crown Prince Mohammad bin Salman Al Saud.

Earlier this year, the Riyadh regime cancelled financial perks for public sector employees and slashed salaries of ministers and members of the Consultative Assembly of Saudi Arabia, also known as the Shura Council.

It further froze major building projects and made unprecedented cuts to fuel and utilities subsidies.

The cutbacks sparked concerns among retailers and residents.

The developments come amid the country’s rising military expenditure, a large amount of which is being funneled into a military campaign against neighboring Yemen.

Saudi Arabia has been incessantly pounding Yemen since March 2015 with the purpose of reinstalling the country’s former government, a close Riyadh ally, Press TV reported.

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