Saudi Arabia has recorded a budget deficit for the last four years in a row, totaling 260 billion dollars because of its military aggression on Yemen. In exchange for US protection Saudi Arabia is financing conflicts and buying positions in a number of countries in the region.
According to the AFP, the IMF said in a report that the increase in spending will expose the Kingdom's budget in the event of an unexpected drop in oil prices.
The report stressed "the importance of ensuring that spending remains at a sustainable level in various oil price conditions and the need to avoid fiscal policy that could lead to disruptions in economic activity."
Saudi Arabia's revenues rose 67 percent in the second quarter of 2018, mainly due to high oil revenues. In the same period, public sector spending rose by 34 percent, according to government statistics.
About half of government spending to pay public sector salaries, according to the International Monetary Fund, which said that "the workforce can gradually decline through natural attrition."
Saudi authorities informed the International Monetary Fund that the civil service was under review with the assistance of the World Bank.
"High oil prices should not slow down the momentum of reform," the report added, stressing that "continuing to commit to broad reforms will help achieve fiscal targets and promote non-oil growth."
The International Monetary Fund last month raised its forecast for Saudi Arabia's growth to 1.9 percent this year and next. The Saudi economy fell by 0.9 percent last year for the first time since 2009 due to the collapse of oil prices.
Saudi Arabia's budget deficit is expected to continue falling from 9.3 percent of gross domestic product last year to 4.7 percent in 2018 and 1.7 percent next year, according to the International Monetary Fund.
Reuters quoted source as saying, Saudi Arabia's sovereign wealth fund has raised a $ 11 billion loan from banks as it seeks to bolster its financial position to finance the country's economic transformation plans.
The loan comes after Saudi Arabia indefinitely postponed plans to list the giant oil company Aramco on the bourse, according to four sources in the sector. The size of the loan exceeds the indicative size of $ 6-8 billion.