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Saudi Arabia could book a budget deficit of as much as $61 billion this year under the double blow of the coronavirus pandemic and the global oil glut, research from financial firm Jadwa Investments has suggested.

This would represent almost 8 percent of the Kingdom's GDP, Arabian Business reported, adding that the budget revenue for the year will be a bit lower than what the government projected in its budget draft, at $210 billion (791 billion riyals).

Spending, on the other hand, will come in at $270 billion (1.02 trillion riyals).

"Overall, it is worth noting that, at this moment in time, the range of potential effects of Covid-19 on the kingdom's economy are highly uncertain," the Saudi firm said as quoted by Arabian Business.

Some 511 cases of Covid-19 have been diagnosed so far in the Kingdom. According to Jadwa, as negative as the pandemic is for oil prices, there is space for optimism, mostly because governments are pledging fiscal stimulus and other support measures for national economies. According to the Saudi company, this should lead to a rebound in oil demand and this, in turn, will help Saudi Arabia achieve significant economic growth, from 0.3 percent for 2019 to as much as 6.3 percent. Related: Largest Oil Glut In History Could Force Crude Prices Even Lower

How realistic this is remains to be seen, as many analysts expect crude oil price to fall even further, not least because of Saudi Arabia's commitment to boost production past the 12-million-bpd mark starting next month. Under the weight of the combination between a pandemic and a rising supply of oil, Brent and West Texas Intermediate have both dropped below $30 a barrel, with Brent at $28.52 and WTI at $22.84 a barrel at the time of writing.

Meanwhile, analysts are warning that global oil storage is filling up and this could push prices further down, possibly as low as $10 a barrel. There are some 750 million barrels of oil in storage globally, according to calculations from data analytics company OilX, and this could rise to 1 billion barrels.

By Irina Slav for Oilprice.com

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Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More