Saudi economy avoids crisis but outlook murky for deficit, growth | Reuters

Saudi economy avoids crisis but outlook murky for deficit, growth | Reuters:

"Saudi Arabia has avoided an economic crisis due to low oil prices this year but the outlook for state finances and growth will remain murky for many months to come, businessmen and analysts in the kingdom say.

Six months after the government launched its most radical economic reforms in decades, it has scored several victories. Drastic spending cuts seem to be reducing its budget deficit, which totaled a record 367 billion riyals ($98 billion) last year, by much more than originally planned.

A $17.5 billion sovereign bond issue last month opened an overseas borrowing channel which Riyadh can use to slow the drawdown of its foreign reserves, buying more time to adjust its economy to an era of cheap oil, and for the foreseeable future almost eliminating the risk of a currency devaluation."



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