Tough policy reforms are needed in Saudi Arabia if the kingdom is to avoid running a budget deficit from 2014, a report has warned.
High government spending, a lack of increases in oil output and rising domestic crude consumption are setting the country on a path to escalating debt, said the report by Jadwa Investment, a Saudi financial services company.
'Preventing this outcome requires tough policy reforms in areas such as domestic pricing of energy and taxation, an aggressive commitment to alternative energy sources, especially solar and nuclear power, and increasing the kingdom's share of global oil production,' Brad Bourland, the chief economist, and Paul Gamble, the head of research, wrote in the report by the Saudi investment company.
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