Saudi Reforms to Yield $90 Billion Boost by 2020, IMF Says - Bloomberg

Saudi Reforms to Yield $90 Billion Boost by 2020, IMF Says - Bloomberg:

"Saudi Arabia may get a budget boost of more than $90 billion by 2020 from new taxes and the planned reform of fuel subsidies and prices, International Monetary Fund projections show.

Additional non-oil revenue, including from a value-added tax and excises on tobacco and energy drinks, is forecast to reach 4.8 percent of gross domestic product -- estimated by the IMF to be $722 billion in 2020. Net gains from energy price reforms may total 210 billion riyals ($56 billion), including the cost of support programs to help households and industry adapt. The estimates were included in a report compiled after a staff visit in May.

The IMF sees Saudi Arabia’s long-term plan for an economy less reliant on oil as a catalyst to improve the kingdom’s fiscal balance, after a plunge in crude prices triggered a budget deficit of more than 16 percent of GDP last year. But the Washington-based lender has also advised the government to roll out spending cuts and austerity measures more gradually, even it if means pushing back a self-imposed target of balancing the budget by 2019.

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