Saudi Arabia’s 2016 growth to further dive amid rising public debt

Revenue from oil sales in 2015 will be 444.5 billion riyals down by 23 percent from 2014, according to the finance ministry statement.

Saudi Arabia has announced it will raise domestic petrol prices by more than 50 per cent for some products as it slashes subsidies to fight a record budget deficit.

“The kingdom reduced its dependency rate on oil revenues in 2015 and it will do the same in 2016 to overcome any negative impact from the decline in oil prices”, Sfakianakis said.

China’s yuan briefly touched a 4-1/2 year low due to strong year-end dollar demand before recovering again while Russia’s rouble weakened 0.5 percent against the dollar, its fourth straight session in the red.

Spending on military and security projects reached 20bn riyals in 2015, Saudi Arabia said, following its intervention in Yemen as well as action against militant group Islamic State.

Next year’s budget projects spending of SR840 billion, down from SR975 billion actually spent this year.

The government also said it was hiking prices for fuels, water and electricity as well as gas feedstock used by industry, as part of politically sensitive subsidy reforms.

However, those stocks surged 9.9 and 9.6 percent respectively on Monday in anticipation of the budget, so they may not rise further in the short term. To cover the difference between its spending and revenue over the past year, Saudi Arabia has drawn its reserves down from $728 billion at the end of last year to around $640 billion.

Saudi Arabia announced on Monday it was raising domestic fuel, power and water prices, according to the official Saudi Press Agency.

Jadwa Investment estimated the cost of energy subsidies in Saudi Arabia at $61 billion in 2015, of w …

In order to address the situation, the Gulf kingdom has set the price of 95 octane gasoline at 0.90 riyals ($0.24) per litre up from 0.60 riyals per litre – a hike of 40 percent.

Saudi Arabia said Wednesday that it would continue to “satisfy” additional demand for oil even as crude futures fell on data showing USA stockpiles growing.

Almost half of this year’s spending, or around $120 billion (450 billion riyals), went to wages, salaries and allowances.

The International Monetary Fund warned in October that Riyadh would run out of money within five years if it did not tighten its belt.

Public Debt Government bonds were issued to the local financial market during the current fiscal year, totaling SR 98 billion.