Is Saudi Arabia in financial trouble?

Higher oil prices are giving Saudi Arabia’s public finances a boost after last year’s crisis sent its budget deficit soaring to nearly 300 billion riyals. Officials aim to slash that figure to 141 billion riyals in 2021, targeting a deficit of around 5\% of gross domestic product.

What is the current economic situation in Saudi Arabia?

Saudi Arabia’s economic freedom score is 66.0, making its economy the 63rd freest in the 2021 Index. Its overall score has increased by 3.6 points, primarily because of an improvement in business freedom.

Does Saudi Arabia have a weak economy?

Saudi Arabia’s economy was hit hard by the double whammy of the global Covid-19 crisis and the marked decline in oil prices in 2020. Real GDP contracted by -4.1\%, following an already meagre expansion of just +0.3\% in 2019. This means that the pre-crisis level of GDP from Q4 2019 will only be reached in H2 2022.

What are the weaknesses of the Saudi economy?

Structural weaknesses Saudi Arabia’s economic structure is unbalanced. The country possesses the world’s second-largest proven oil reserves (>15\% of global resources) and, at current rates of extraction, its oil will last for over 60 years. In addition, gas reserves will last for a further 72 years.

Are there any current international disputes in Saudi Arabia?

Though all current foreign political tensions of Saudi Arabia are with its immediate Middle Eastern neighbors, they all are unlike in their nature bare different consequences for the oil rich kingdom. Since 2015 Saudi Arabia is involved in a war with its southern neighbor Yemen, one of the least developed nations.

What are Saudi Arabia weaknesses?

Weaknesses

• High dependence on hydrocarbon despite economic diversification efforts.
• Exposure to volatility in energy prices.
• Dependence on foreign labor.
• Weakness in the non-oil sector exacerbated by COVID-19.

Is Saudi Arabia risky?

Country risk in Saudi Arabia is low. The OECD country credit grade is 2. Saudi Arabia has investment grade sovereign credit ratings from all three major private rating agencies. The World Bank’s ease of doing business gauge ranks Saudi Arabia’s business climate 62nd out of 190 economies.

What is Saudi Arabia’s greatest economic resource?

Petroleum. The economy of Saudi Arabia is dominated by petroleum and its associated industries. In terms of oil reserves, Saudi Arabia ranks first internationally, with about one-fifth of the world’s known reserves.

What are the bad things about Saudi Arabia?

Background. Saudi Arabia is one of approximately 30 countries in the world with judicial corporal punishment. In Saudi Arabia’s case this includes amputations of hands and feet for robbery, and flogging for lesser crimes such as “sexual deviance” and drunkenness.

How many years of oil does Saudi Arabia have left?

Oil Reserves in Saudi Arabia Saudi Arabia has proven reserves equivalent to 221.2 times its annual consumption. This means that, without Net Exports, there would be about 221 years of oil left (at current consumption levels and excluding unproven reserves).

What are the biggest challenges facing Saudi Arabia?

Yet Saudi Arabia still faces some serious and mounting challenges as follows: This week’s austerity announcements will have come as unwelcome news to many Saudis, who had been looking forward to a brighter future under grandiose plans to diversify the economy away from oil income.

Will Saudi Arabia’s exports fall to zero in the next 15 years?

From 2005 to 2015, Saudi net exports have experienced an annual decline rate of 1.4 percent, within the range predicted by Brown and Foucher. A report by Citigroup recently predicted that net exports would plummet to zero in the next 15 years.

Is Saudi Arabia’s oil wealth enough to stop civil unrest?

Saudi Arabia’s oil wealth, and its unique ability to maintain generous subsidies for oil, housing, food and other consumer items, plays a major role in fending off that risk of civil unrest. Energy subsidies alone make up about a fifth of Saudi’s gross domestic product.

What is happening to Saudi Arabia’s oil revenue?

This means that Saudi state revenues, 80 percent of which come from oil sales, are heading downwards, terminally. Saudi Arabia is the region’s biggest energy consumer, domestic demand having increased by 7.5 percent over the last five years – driven largely by population growth.