Saudi Arabia said on Monday it expects to run a budget deficit in 2009 for the first time in seven years. The world’s largest oil producer is seeking to bolster the economy by increasing public spending in spite of the collapse in crude oil prices.

The finance ministry said revenue was projected to be SR410bn (£73.6bn, $109bn, €78bn) in the next fiscal year, compared with a record SR1,100bn in 2008. It did not reveal its oil price forecast but economists estimated the government was predicting an average of $40 a barrel for 2009.