- Saudi Arabia anticipates a reduced budget for the upcoming year as the government endeavors to stabilize oil markets through production cuts. According to a preliminary budget statement released by the Kingdom's Finance Ministry on Saturday, they expect a deficit of 79 billion riyals ($21 billion) in the next year, equivalent to 1.9 percent of the gross domestic product. The projected spending for 2024 is estimated at 1.25 trillion riyals, with expected revenue of 1.17 trillion riyals, and the economy is predicted to grow by 4.4 percent.
- Bloomberg Economics suggests that the $1.1 trillion economy is likely to contract this year, primarily due to the Saudi government's implementation of oil supply cuts aimed at boosting prices. These cuts have tightened global crude markets during a period of record demand, leading to Brent futures rising above $90 per barrel. The increase in oil prices will provide the world's largest oil exporter with greater flexibility to maintain substantial government spending, much of which is allocated to significant projects aimed at diversifying the economy, and to support the non-oil sector.
Why it matters
According to the preliminary statement, Saudi Arabia's debt portfolio is expected to expand while remaining sustainable. In 2023, the kingdom has been one of the most active bond issuers in emerging markets, as reported by Bloomberg data.