The budget was announced yesterday and the finance ministry said expenditure would hit more than 978bn riyals ($261bn) in the new year, up from 926bn riyals in 2017.

But the finance ministry said the target to balance the budget had been pushed back from 2020 to 2023, after the IMF urged the government to scale back on austerity measures to boost growth.

The finance minister Mohammed al-Jadaan told reporters: “The government has decided that now it can spend more while keeping the deficit within the targeted limit and that it can achieve more non-oil revenue.

“That’s why balancing the budget has been postponed to 2023. We are not in a hurry.”

The Saudi economy has been struggling since the fall in oil prices in 2014 and the government has cut both spending and subsidies as it worked to keep its fiscal deficit in check.

The economy fell into recession in 2017 because of lower oil output and weak confidence in the private sector. But the finance ministry said forecast growth would bounce back to 2.7% in 2018.

The IMF said in October that the country’s fiscal reforms were ‘bearing fruit’ and the economy was adapting to lower oil prices.

Earlier in December, the Saudi king also approved a 72bn riyals ($19.2bn) programme to stimulate growth in the private sector in an attempt to get the economy back on track.