Guest Posted July 16, 2015 Report Share Posted July 16, 2015 http://www.cnbc.com/...-hits-home.html Saudi Arabia has borrowed $4bn from local markets in the past year, selling its first bonds for eight years as part of efforts to sustain high levels of public spending as oil prices slump. Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency, said the government would use a combination of bonds and reserves to maintain spending and cover a deficit that would be larger than expected. "We expect to see an increase in borrowing," he said, according to a report in the economic daily Al-Eqtisadiah newspaper over the weekend. Analysts have estimated a deficit of about $130bn this year. The government, which had not tapped bond markets since 2007, has been dipping into its large foreign reserves, which peaked at $737bn last August, to sustain spending on wages, special projects and the Saudi-led air war on Yemen. It has drawn down $65bn since oil prices fell. Bonus payouts for state employees and the military made by the new king, Salman bin Abdulaziz Al Saud, have placed further pressure on state coffers. "Reality is hitting home, and necessity is also hitting home," said John Sfakianakis, director for the Gulf region at Ashmore, a fund manager. Saudi Arabia needs an oil price of $105 a barrel to meet planned spending requirements, but the average price for the year is estimated at $58 a barrel, he said. "If the government continues business as usual and draws down like this it will deplete reserves faster than expected, by the end of 2018 or early 2019," added Mr Sfakianakis. The issuance of domestic bonds should ease the rate of drawdown on Sama's overseas assets, which declined to $672bn in May. The domestic bond programme marks a shift in strategy as the sustained slump in oil prices takes its toll on Saudi finances. Link to comment Share on other sites More sharing options...
Flashermac Posted July 16, 2015 Report Share Posted July 16, 2015 Maybe the princes will have to sell of some off their palaces and cars. Link to comment Share on other sites More sharing options...
Coss Posted July 16, 2015 Report Share Posted July 16, 2015 I'm amazed they have to borrow, all that money and they still spend more than they have ... Link to comment Share on other sites More sharing options...
waerth Posted July 16, 2015 Report Share Posted July 16, 2015 The more easy the money comes in .... the more easy you spend it. I have known massage parlour girls making 120,000bt a month. Way more than Dutch minimum wage. Yet they could not afford their 5000bt rent every month as it all went away on buying useless shit and partying and financing boyfriends. W Link to comment Share on other sites More sharing options...
pasathai1 Posted July 16, 2015 Report Share Posted July 16, 2015 if all their "hired help" left they would be living back in the dunes in short order 1 Link to comment Share on other sites More sharing options...
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