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Saudi company expects government debt to reach $228 billion

April 21, 2020 at 12:14 pm

A man counts Saudi riyal banknotes at a market in Riyadh, Saudi Arabia. [Fayez Nurdeline /AFP/Getty Images]

An investment company in Saudi Arabia has said that it expects the Kingdom’s debts to reach $228 billion (855 billion riyals) this year, and the budget deficit to pass $120bn (450bn riyals), or 15.7 per cent of its GDP.

A report by Jadwa Investment Company predicts that oil and non-oil revenues will decrease to about $174bn (654bn riyals) while expenditure will increase to $287bn (1.076 trillion riyals). The company disagrees with the Ministry of Finance’s estimates of public debt by $27bn (100bn riyals).

In March, Saudi Finance Minister Mohammed Al-Jadaan said that the government will have to borrow more this year due to the coronavirus pandemic and the decline in oil prices. He expects that the additional borrowing will not exceed 100bn riyals.

Jadwa also expects the Kingdom’s GDP to shrink by about 1.7 per cent in 2020, with the oil sector output declining by 0.4 per cent, and the non-oil sector output declining by 2.6 per cent.

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