The Saudi new car market is set to take a big hit following reports that the government has introduced unprecedented austerity measures due to the recent fall in the oil price. All government departments are understood to have been instructed to cease purchases of major items, including vehicles and furniture, according to sources quoting an internal memo issued by King Salman to the Ministry of Finance.
Depressed oil prices have had a significant impact on the country’s public finances, to the extent that a public deficit equivalent to 20% of GDP is expected this year. The country’s involvement in the civil war in neighbouring Yemen is also understood to have had a significant impact.
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The memo also gave strict instructions to stop government departments signing off on new projects, including property agreements, and from making new appointments and awarding staff promotions.
