Record Slide in Saudi Loans to Companies Poses Risk to Recovery - Bloomberg

Record Slide in Saudi Loans to Companies Poses Risk to Recovery - Bloomberg:

"Saudi bank lending to private companies shrank for an 11th month in January, the longest stretch in at least two decades, underscoring the challenge facing officials trying to boost growth in the largest Arab economy. Data released last week by the Saudi Arabian Monetary Authority showed total credit issued to private companies fell 1 percent from a year earlier, compared with a 41 percent jump in lending to the public sector -- the most in 11 months. That’s a problem for authorities looking to bolster non-oil private industries to overhaul an economy long reliant on oil revenue and state spending. It also illustrates how the government is caught between competing desires to stimulate the economy while shoring up public finances, after the plunge in oil prices in 2014 caused the budget deficit to surge. The kingdom has introduced value-added tax and removed some fuel subsidies, but also rolled out a package of handouts to offset the impact."



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