Saudi Arabia unveiled Thursday the largest budget in history for 2015, projecting spending at record SR860 billion, despite a sharp fall in oil prices. The budget projected revenue at SR715 billion showing a huge deficit of SR145 billion for the first time since 2011.

Custodian of the Two Holy Mosques King Abdullah expressed optimism that the Kingdom would continue its economic growth, driven by private sector activity, integration of public and private sectors and improvement of private sector performance.

Crown Prince Salman, deputy premier and minister of defense, chaired the Cabinet’s special budget session to approve the budget on behalf of King Abdullah.

In his address to the nation on the occasion, King Abdullah said the expansionary budget was aimed at enhancing the citizens’ progress and prosperity and creating more job opportunities for them.

In his keynote speech, which was delivered by the Cabinet’s Secretary-General Abdul Rahman Al-Sadhan, King Abdullah said the budget was aimed at boosting comprehensive and balanced development. “My brothers, you are well aware that the global economy is showing weakness in growth, in addition to what the global oil market is going through, which contributed to a significant drop in oil prices,” the king told citizens.

“We have issued our directives to officials that the next year’s budget shall take into consideration these developments and rationalize expenditures, taking care of everything that serves citizens, improves services provided to them, implements strictly and efficiently the budget’s programs and projects.”

King Abdullah said the Kingdom was seeking sustainability of strong public finances status, and giving priority in the next fiscal year for completing the implementation of projects approved in previous budgets, which are huge projects.

King Abdullah said the government would continue to focus on education, address labor market imbalance to create more job opportunities for citizens and ensure optimal use of resources. The 2015 budget has allocated funds for three new universities.

King Abdullah also urged citizens to preserve the country’s security and stability. He urged all ministers and officials to exert maximum efforts to implement the budget’s programs and projects efficiently and with quality to achieve its goals.

Finance Minister Ibrahim Al-Assaf said the 2015 deficit would be covered by the country’s huge reserves from previous surpluses. Speaking to Saudi Television after presenting the budget, he said the government would continue spending actively on economic development projects “over the medium term.”

Asked whether he meant three to five years, the minister replied: “Yes, over three to five years…The (economic) depth we have, God willing, will be enough until prices get better.”

Al-Assaf said everybody expected prices to rise eventually but there was a difference over when; some people said the second half of next year while others said 2016.

“We have the ability to endure low oil prices over the medium term,” he said. The Kingdom’s total cash reserves stood at SR1.492 trillion in October 2014 while its total reserves in assets amounted to SR2.78 trillion, enough to cover deficits of the size projected in 2015 for several years.

The stock market reacted positively as the Tadawul All-Share Index rose 49.56 points or 0.57% to close at 8,749.34 points.

The value of traded shares reached SR11.32 billion. Petrochemical industries index dropped 0.14% while industrial investment index rose 4.18% and hotel and tourism index was up 2.8%.

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.

Al-Assaf said the Kingdom would continue spending actively on economic development projects, social welfare and security despite the oil price slide and challenging conditions in the global economy.

He said the Kingdom’s GDP was to reach SR2,821.7 ($752.5) billion by the end of 2014 with a growth rate of 1.09 percent compared to 2013. The nonoil GDP is estimated to grow 8.21 percent, whereas the nonoil public and private sectors 6.06 percent and 9.11 percent, respectively, and the oil sector to decline by 7.17 percent.

Labor Minister Adel Fakeih said the new budget would accelerate growth and enhance welfare of citizens. “It also reflects the strength of Saudi economy and its ability to withstand challenges…It also gives the message that citizens are the real asset of the Kingdom and the driving force for growth.”

Higher Education Minister Khaled Al-Sabti said the budget has allocated more than SR80 billion for higher education projects. “During the past 10 years there was 86 percent growth in number of universities, which has reached 28,” he said, adding that they accommodate over 1.5 million students.

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