IMF: Saudi Arabia is threatened with the loss of financial reserves

Section: Economic page
October 23, 2015 6:21 pm

The IMF predicted the Saudi Arabia to spend all financial reserves over the next five years, amid falling oil prices by more than half since the middle of last year.

The IMF pointed out in his report on the Middle East said Friday that "the budget deficit to the largest economy in the region is expected to reach this year, 21.6% of GDP, and 19.4 percent next year".

Saudi Arabia, recorded another deficit in 2009, when oil prices plummeted for a short period due to the global financial crisis.

The report paints a gloomy picture of the financial pressures on Riyadh's oil revenues, which make up about 90% of their revenue, so will force Riyadh to search for financial resources to support spending. Like its neighbours for oil exporters in the Gulf region will work to reduce expenditure in the budget.
Masood Ahmed, Director of Middle East and Central Asia Department at the International Monetary Fund that the falling prices of crude oil exporters in the region cost large sums, which stood at about 360 billion dollars last year.

He Ahmed earlier that "Saudi Arabia need significant financial adjustments and the structure of the last several years."

Saudi Arabia has also withdrawn nearly $ 70 billion during the last 6 months of investments around the world, and to bridge the budget deficit. In addition to declining financial reserves of about $ 73 billion, with crude oil prices start down, which declined since June 2014 to 60% after production started the high world collides with slowing global economic growth, to 654.5 billion dollars, after the Kingdom's sovereign fund record highs in August 2014, reaching $ 737 billion.