Saudi Arabia’s budget will be in deficit with oil prices below $80 per barrel – Kommersant
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The International Monetary Fund (IMF) believes that the Saudi authorities will not be able to balance the budget if oil costs less than $80 per barrel, writes Bloomberg. The fund estimates that the break-even price for Saudi oil in 2023 will be $80.9 per barrel. The Kingdom risks returning to a budget deficit after its first surplus in almost a decade, the IMF believes.
Taking into account current forecasts for quotations, the kingdom’s budget deficit by the end of 2023 will be 1.1% of GDP, the IMF believes. Analysts at Bloomberg Economics also note that Saudi Arabia needs an oil price above $80 (perhaps closer to $100) per barrel to fulfill all obligations and ensure social programs.
The Saudi authorities have stopped disclosing the forecast for oil revenues, Bloomberg notes. The alarming budget forecast, the publication believes, could have influenced the “unexpected decision” to reduce oil production, taken by the kingdom together with OPEC. The IMF believes that the current situation will encourage the authorities of Saudi Arabia to diversify the economy.
About the current dynamics of prices for energy raw materials – in the material “Kommersant” “Prices slow down the global economy”.
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