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Saudi Arabia confirms its readiness to meet the budget deficit
2/11/2015 0:00
Baghdad follow up the morning
after the agency «Standard & Poor's» downgraded Saudi Arabia's credit, several observers said the latest warning about the troubles facing the Middle East's oil-based.
While said Saudi Arabia and the Ministry of Finance on the resolution, saying it «hasty» where Agency based its evaluation of the current and non-sustainable factors as there was no adverse change in the fundamental factors that typically require changing the evaluation, vowing to confront the budget deficit and maintain the pace of economic growth.
lowered the credit rating agency «Standard & Poor's» rating Arabia credit rating by one notch, to settle in «A +», due to falling oil prices and fueled fears.
The agency said: The big fall in oil prices over the past 18 months caused the creation of «swing negative clear» in the financial picture in the Kingdom of Saudi
Arabia.
and decreased the oil-rich capabilities Kingdom from a surplus of healthy budget by seven percent of GDP in 2013 to a projected deficit of 16 percent this year.
The credit rating agency estimated that oil prices do not rise dramatically, will suffer Arabia from the deficit in the next three years, (and I mean credit rating of at least that borrowing would become more expensive for Saudi Arabia), where the problem lies in Saudi Arabia heavily dependent on oil, which is derived from 80 per cent of its revenues.
As the International Monetary Fund warned recently most countries in the region, an out of cash in five years or less if ranged prices Oil near $ 50 a barrel, and this includes Saudi Arabia warning, Oman and Bahrain, as the fund as the suffering of the Saudi government's budget deficit exceeds $ 100 billion annually after warnings from the exhaustion of UK financial reserves in the coming years if fiscal policy remained unchanged.
and continue to look «Standard & Poor »to lead the negative OPEC, which leaves the company the option to cut more than that credit rating on the table if the government to rein in the deficit or low liquidity failed, noting at the same time spending« inflexible »as one of the« weak points »State plans of the
financial.
it predicted Agency that the kingdom will respond by pulling its stockpile of cash and the issuance of additional debt, and the state has already sold bonds during the summer to raise $ 4 billion at least, and that was the first time that the Kingdom resorted to the bond market in eight years.
The withdrawal of the Saudi central bank also up to $ 70 billion of asset management companies such as «Black Rock» during the first half of last year.
Other possible changes to postpone some spending projects and reform the generous for electricity, water and fuel subsidies, where the source said recently the Saudi government: The Kingdom is considering reducing government support for gas.
expects the Standard & Poor's based on the premise of the implementation of the reforms of spending and support that the net assets fall to the government to 79 percent of GDP by 2018.
On the other hand, said Saudi Foreign Minister Adel al-Jubeir: The Riyadh able to cope with the budget deficit, despite falling oil prices, saying during a conference «Manama Dialogue» in the Bahraini capital, that the pace of economic growth and financial strength in the country will remain strong.
as they face Saudi Arabia a large deficit in the public budget because of lower oil prices, which led to the decline largest oil exporter in the world profits.
In Saudi Arabia said the Ministry of Finance: The decision of the Foundation «Standard & Poor's» cut credit rating Kingdom is a reaction of hasty and unjustified and not based on facts, but pointed out the foundations of the Saudi economy, which is still strong, with net assets more than 100 percent of GDP and a large foreign exchange reserves.
The ministry said in a statement that the UK economy continued real growth rate exceeding similar economies in spite of lower commodity prices, add to that what has been done to fiscal consolidation and to ensure that supporting assets remain to keep the public finances in a position
strong.
For his part, member of the Shura Council and chief economist at Saudi d agreed. Saeed Sheikh with Saudi Arabia and the Ministry of Finance to object to the assessment, a reference to a number of reasons, most notably the economic growth continued moderately, as well as the existence of reserves of foreign superiority of GDP, the government helps to finance any potential deficits of the budget during the few years
to come.
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