RIYADH — Saudi Arabia has raised $4.53 billion from a local Islamic bond issue that was three times oversubscribed, it said Tuesday as it battles a budget deficit caused by low oil revenues.

The finance ministry said orders exceeded 52 billion riyals ($13.6 billion) for its first issue of domestic sukuk bonds worth 17 billion riyals.

It said the new bonds would be divided into three tranches, with maturities ranging from five to ten years.

"The strong demand for local bonds reflects the confidence of investors in the kingdom's issuings and confirms the strength of the Saudi economy's foundations," the ministry said in a statement.

In April Saudi Arabia raised $9 billion in its first global Islamic bond issue, a move analysts said could ease pressure on its foreign reserves.

But the largest Arab economy is suffering from a sharp slide in oil revenues since crude prices plummeted in mid-2014, forcing Riyadh to cut subsidies and delay projects.

The kingdom forecast a budget deficit of $53 billion this financial year, down slightly from last year's shortfall.

Economic growth in Saudi Arabia is expected to hit just 0.1 percent this year, the International Monetary Fund said Tuesday, down from the 0.3 percent it projected in April.

That would be the country's worst growth since 2009, when its economy contracted by 2.0 percent as oil revenues slumped following the global financial crisis. — AFP