Saudi Arabia to Raise Spending, Cover Deficit with Reserves 

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DUBAI—

Saudi Arabia plans to raise government spending 0.6 percent to a record high in its 2015 budget while covering a large deficit due to plunging oil prices with its huge fiscal reserves, the Ministry of Finance said on Thursday.
The budget gives the first detailed look at how the world's top oil exporter intends to handle an era of cheaper oil.
The stock market rose in the minutes after the announcement, trading 0.9 percent higher.
Financial markets had feared the kingdom might cut spending sharply, but the plan suggests Saudi authorities are confident of their ability to ride out a period of low oil prices and see no need for major austerity.
Some analysts believe Riyadh is content to see oil prices fall as a way to squeeze out competing producers in non-OPEC nations. The budget figures imply it could pursue this strategy for years if it felt that was necessary.
Spending in the 2015 budget is projected at 860 billion riyals ($230 billion), up from 855 billion in the 2014 budget plan. While that is a record amount, it is the smallest increase in more than a decade.
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