"Most expectations are favouring a modest increase in public expenditures, which is positive news for investors in local securities and alternative investments as well," Abdullah Alawi, Head of Research at Aljazira Capital told CNBC.
"We believe Saudi Arabia and other GCC economies will run through their existing mega infrastructure and welfare plans to enhance their efficiency, while resetting priorities and project deadlines to accommodate the new oil market realities".
Saudi Arabia has massively ramped up its spending since the Arab Spring popular uprising in 2011. Annual expenditures since 2010 have risen by at least 50 percent, and have mostly focused on infrastructure and social projects.
The country's government should be able to mitigate the short-term economic risks that are bound to arise from lower crude prices, thanks to having one of the world's largest foreign currency reserves, estimated at $750 billion in 2014. Still, it is the dent in sentiment that will be difficult to fix.
"The decline in oil prices to the level where it pushes the fiscal budget into a deficit has the potential to create a negative psychological impact on the performance of the private sector," Riyadh-based Jadwa Investment maintained in a report said earlier this month.
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