Saudi Arabia considers paying contractors with IOUs amid projected budget deficit brought on by oil slump

, Canada

Deputy Crown Prince Mohammed bin Salman told Bloomberg News in an interview in March that authorities have started paying companies back. According to multiple sources, the country  is considering giving contractors IOUs to settle some outstanding bills.

Saudi Arabia has told banks in the country that it is considering giving contractors IOUs to settle some outstanding bills, according to people with knowledge of the discussions.

A projected budget deficit this year is prompting the government to weigh alternatives to limit spending. Contractors would receive bond-like instruments to cover the amount they are owed by the state which they could hold until maturity or sell on to banks, the people said, asking not to be identified because the information is private.

Contractors have received some payments from the government in cash and the rest could come in “I-owe-you” notes, the people said.

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