Spending cuts likely to reduce credit growth | GulfNews.com

Spending cuts likely to reduce credit growth | GulfNews.com:

"The spending cuts announced by Saudi Arabia in its 2016 budget is expected to impact credit growth in the country as non-oil activity continues to slow.

Countercyclical government spending has historically played a key role in the stability and dynamism of private-sector companies in Saudi Arabia, supporting banks’ credit growth.

Following the recent period of robust growth in public expenditure, the government in Saudi Arabia is now planning to moderate the pace of such spending expansion due to the persistent drop in oil revenues. Analysts said a combination of more expensive credit and more frugal governments will result in slow credit demand from the private sector."



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