Saudi needs Aramco billions as recession slows austerity drive

Saudi needs Aramco billions as recession slows austerity drive:

"Saudi Arabia’s plans to sell state assets - including a stake in energy giant Saudi Aramco - are becoming even more important to its finances as a recession slows Riyadh’s effort to close a budget deficit caused by low oil prices.

Last December, Riyadh released a plan to abolish the deficit by 2020, cutting it from $79 billion (£60 billion) or 12.3 percent of gross domestic product in 2016 via steps such as domestic energy price hikes and tax rises. The plan eased investor fears about Saudi Arabia’s fiscal stability and reduced pressure on its currency.

 But in recent weeks, it has become clear from official statistics that the 2020 target is much too optimistic, economists said. Austerity measures so far have pushed the economy into recession, with GDP shrinking for a second straight quarter in the April-June period.

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