Saudi Arabia Tucks Away Billions in Oil Money For Next Year - Bloomberg
Saudi Arabia will hold billions of dollars from its oil windfall in a government current account until the end of the year and only then decide how to distribute the money, a shift in its strategy from previous boom periods.
In the past, higher oil prices and output would quickly translate into rising foreign reserves and deposits in local banks, and often lead to a swift boost in the government’s spending. But this time, it will wait until “after the surplus is realized, which means after the closing of the fiscal year” in December, according to Finance Minister Mohammed Al-Jadaan.
In a statement to Bloomberg, Al-Jadaan said the government won’t spend the money until it’s rebuilt reserves depleted during eight years of subdued oil prices. It could then use some of the cash to repay debts and pour it into state investment vehicles, including the powerful Public Investment Fund and the National Development Fund, which focuses on domestic infrastructure.
“The surplus achieved in the first quarter is shown in the government current account and has not yet been deposited to government reserves nor transferred to other groups,” he said.
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