Saudi Arabia to hit debt market to plug spending spree
Saudi Arabia to hit debt market to plug spending spree
Saudi Arabia will issue bonds by January to fund government spending.
2 min read
Saudi Arabia is edging on an ambitious diversification plan [Getty]
Saudi Arabia will hit debt markets in January 2020 to fund government spending, as Riyadh is projected for another deficit next year.
Saudi revenues are forecast for 833 billion riyals ($222.1 billion) next year, with an expected deficit of 187 billion riyals ($50 billion). Saudi Arabia's projected budget deficit for 2019 will be $35 billion.
Saudi revenues are forecast for 833 billion riyals ($222.1 billion) next year, with an expected deficit of 187 billion riyals ($50 billion). Saudi Arabia's projected budget deficit for 2019 will be $35 billion.
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"We are very much ready, as early as the first of January, to issue our international bonds subject to market conditions of demand and supply," Fahad al-Saif, the head of Saudi Arabia's debt management office (DMO), according to Bloomberg.
"We're assuming between 30 billion riyals ($8 billion) and 35 billion riyals ($9 billion) is going to be the international part of our issuance for the year."
Saudi Crown Prince Mohammed bin Salman acknowledged that there could be economic challenges in 2019.
"The 2020 budget comes amid challenges, risks and protectionist policies facing the global economy, which requires flexibility in managing public finances," he said, according to Saudi Press Agency.
Crown Prince Mohammed's Vision 2030 has been seen as key to his plans to diversify the kingdom's oil-reliant economy.
This includes the construction of a $500 million futuristic city named NEOM in the northwest of the country, as well as plans for an entertainment city and other leisure and industrial complexes.
Saudi Arabia has relaxed social rules, ending gender segregation in restaurants and allowing music concerts and cinemas to take place in the kingdom.
At the same time, Riyadh has clamped down on critics of the crown prince and activism, including women's rights and pro-democracy campaigners.
On Wednesday, Saudi Arabia's national oil company Aramco began trading for the first time on the stock market, becoming the highest-valued listed company in the world.
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"We're assuming between 30 billion riyals ($8 billion) and 35 billion riyals ($9 billion) is going to be the international part of our issuance for the year."
Saudi Crown Prince Mohammed bin Salman acknowledged that there could be economic challenges in 2019.
"The 2020 budget comes amid challenges, risks and protectionist policies facing the global economy, which requires flexibility in managing public finances," he said, according to Saudi Press Agency.
Crown Prince Mohammed's Vision 2030 has been seen as key to his plans to diversify the kingdom's oil-reliant economy.
This includes the construction of a $500 million futuristic city named NEOM in the northwest of the country, as well as plans for an entertainment city and other leisure and industrial complexes.
Saudi Arabia has relaxed social rules, ending gender segregation in restaurants and allowing music concerts and cinemas to take place in the kingdom.
At the same time, Riyadh has clamped down on critics of the crown prince and activism, including women's rights and pro-democracy campaigners.
On Wednesday, Saudi Arabia's national oil company Aramco began trading for the first time on the stock market, becoming the highest-valued listed company in the world.
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