Saudi Arabia’s new budget math is once more entrenching its reliance on high oil prices, in a riskier path for a country whose fiscal choices matter for politicians and consumers around the world.
Following the first surplus in nearly a decade last year, a costly economic makeover under Crown Prince Mohammed bin Salman has prompted a rewrite of projections that now assume deficits until at least 2026. It’s a stark change from plans to keep the budget in the black for years to come.
The upshot is that the kingdom would need crude at $91 per barrel to balance its books in the second half of the year, according to Bloomberg Economics, an increase of $10 from the first six months.
“Higher spending that becomes inflexible through oil price cycles may weaken the government’s currently strong balance sheet,” Moody’s Investors Service analysts including Christian Fang said in an Oct. 4 report.
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