Oil-rich Saudi Arabia will run out of 'financial assets' within FIVE YEARS warns IMF | Daily Mail Online
IMF: Saudi Arabia running on empty in five years - Al Jazeera EnglishSaudi Arabia risks running out of financial assets in less than five years amid a drop in oil prices, the International Monetary Fund has warned.The IMF said oil-exporting countries are facing tough choices as they brace for a $360billion fall in revenues this year.Among the hardest hit is the world's largest oil exporter, Saudi Arabia, which generates about 90 per cent of its income from the sector.The IMF estimates the kingdom will post a budget deficit of more than 20 per cent of gross domestic product this year, amounting to between $100 billion to $150 billion.
Saudi Arabia could burn through its financial assets within five years, as the country grapples with slumping oil prices.Mideast countries face $1 trillion budget shortfall if oil keeps falling: IMF official - MarketWatch
The Middle East’s biggest economy is expected to run budget deficits of 21.6 percent in 2015 and 19.4 percent in 2016, according the IMF’s latest regional outlook.
That means Riyadh needs to find money to meet its spending plans. Just like its oil exporting neighbours, it plans to make substantial cuts to its budgets.
"For the region’s oil exporters, the fall in prices has led to large export revenue losses, amounting to a staggering $360bn this year alone," Masood Ahmed, the IMF’s Middle East director, told reporters in Dubai.
Middle Eastern oil exporters face a combined $1 trillion budget shortfall in the next five years if crude prices stay at present lows and economic reforms aren’t introduced more rapidly, an International Monetary Fund official said.
Countries such as Saudi Arabia and Kuwait are coping with the impact of falling oil prices CLZ5, -0.04% by drawing down some of the vast reserves they built up in recent years thanks to high oil prices. They’ve also started borrowing more, though spending on large infrastructure projects and social handouts hasn’t significantly come down yet.
Masood Ahmed, director of the IMF’s Middle East and Central Asia Department, says these oil-rich countries for now have the capacity to borrow more from the markets, but time is running out because most countries in the region will have burned through their reserves within five years.