New reports published by the IMF detail King Salman’s current fiscal strategy for the KSA, and make predictions for the rest of the year. According to reports the royal family has used up $60 billion of foreign assets in the first six months of the year and borrowed $4 billion from local banks, the IMF predict this deficit could rise to around $140 billion by year-end, which would account for approximate 20% of GDP. While incomparable compared with the deficits of other nations, the Saudi deficit is massive for a country accustomed to running at a large surplus.
Reports also detail that government revenues are set to fall by $82 billion in 2015 or 8% of GDP – oil income accounts for 90% of the state spending.
The royal family’s current predicament is a result of the oil price slump from $107 a barrel about a year ago to below $50 at present. This is bad for King Salman and his subjects, whom require a break-even point of $106 a barrel to fund their generous welfare state and lavish lifestyle.
