Posted on 11/29/2015 11:09:06 AM PST by RoosterRedux
Continued low oil prices and the war in Yemen have hit Saudi Arabia's budget so hard it is creating a special office to oversee government spending and cut waste. On Monday, the Saudi Press Agency published an item noting that Saudi Arabia was "willing to cooperate with OPEC and non-OPEC producers" to maintain a "stable" oil market. WTI retook $42, however analysts remain pretty pessimistic about hopes that the Gulf OPEC nations are in any mood to restrict production, which is hurting budgets but helping with certain political objectives, such as killing US shale and hurting arch-enemy, Iran.
In a Bloomberg report, Zainab Fattah cites two people with knowledge of the matter who claim that the first projected budget deficit since 2009 inspired the decision to create an office to oversee government spending. The project management office will report to the Committee of Economic Development.
*snip*
Standard & Poor's downgrade sparks criticism
The sources cited by Bloomberg said that ministries of housing, municipalities, labor, health, education and transportation will all be affected. The original 2015 budget of $229.3 billion included $49.3 billion in spending on new projects.
This September Saudi Arabia's net foreign assets reached a three-year low as officials dipped into financial reserves. Investments in foreign securities dropped by $23 billion, and the budget woes led Standard & Poor's to downgrade Saudi Arabia.
In 2013 Saudi Arabia boasted a healthy budget surplus of 7% GDP, but the situation has worsened significantly to a projected deficit of 16% in 2015, and could reach as high as 20% next year. According to S&P Saudi Arabia could suffer deficits for the next three years unless oil prices increase significantly.
(Excerpt) Read more at valuewalk.com ...
Thought you might enjoy this...ping.
Uh oh, is this going to affect their mosque-building budget in Germany?!
Oh, dear. Will the Saudi princes have to cut back?
>>Continued low oil prices and the war in Yemen have hit Saudi Arabia’s budget<<
Well perhaps they’ll have to sell a few Mercedes and a palace or two.
Not feeling sorry for the rag heads....at all. They’ve taken advantage of American middle class for decades.
The Saudis’ are the ones who refuse to cut production.
I believe they are trying to put the Fracking producers out of business.
With the current wacko administration they may think if they keep the price low now, the crazies will outlaw fracking.
Well the solution is obvious. They need to import a couple hundred thousand Syrian refugees. They’ve got that big tent city all set up right by Mecca.
L
Gold toilet futures are down.
Zum Wohl! I drink to that.
Saudi ‘to borrow to finance soaring deficit’, says report
8APR2015
http://www.dailymail.co.uk/wires/afp/article-3030265/Saudi-borrow-finance-soaring-deficit-says-report.html
Prince Alwaleed was known to be worth 27 T about 3 years ago, half of which was in gold.
He’s the one that’s behind the attack on US domestic oil producers.
The Saudis $6 extraction cost compared to $32 in the US enables the Saudis to prevail unless we take action to counter. Donald Trump will find a way because it’s much more than just oil. It’s also enormous quantities of natural gas that comes out with the oil and it’s also about US leadership in world trade.
Although Saudi Arabia has low costs of production, they have used oil money to spread around and buy social stability. They need oil above $100 a barrel in order to pay for their social spending. If they cut social spending they risk civil war and the end of the monarchy. If they don’t slash social spending they will dry up their foreign reserves and overseas investments and backrupt themselves. They are in quite a pickle.
Poor babies. 😜
He's the scumbag funds all the islamic centers at top universities.
Hey wait a minute...that’s the bathroom in Trump’s penthouse.;-)
But to borrow from whom???....the US?? Betcha....
“Oh, dear. Will the Saudi princes have to cut back?”
Yeah, they’ll have to forgo the new luxury car replacements that usually are taken when the ashtrays in their current vehicles are full! The sonner that Mecca and Medina are destroyed the better!
“If they cut social spending they risk civil war and the end of the monarchy.”
Can’t wait for that to happen and we see the “royal family” hanging from lamp posts a la Il Duce!
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