Can Saudi Arabia afford giga-projects with oil prices under $75 per barrel?
Riyadh could soon run a current account deficit as oil revenue declines amid huge spending commitments toward ambitious Vision 2030 projects. Saudi-led OPEC has also deferred an output increase plan to allow more time to reach desired oil prices.
DUBAI/WASHINGTON — Saudi Arabia is set to face fresh challenges in financing its giga-projects as oil prices remain below its desired levels to meet spending commitments, particularly those aligned with its Vision 2030 policy.
The International Monetary Fund said in its Article IV review on Wednesday that Saudi Arabia is set to see a current account deficit over the next five years as low oil prices continue to bite into the country's economy.
The IMF said in its review that Riyadh's current account surplus "narrowed significantly to 3.2 percent of GDP in 2023" due to lower oil exports and stronger investment-related imports.
Oil prices fell to a 14-month low on Wednesday, prompting OPEC+, the group that Riyadh heads with Moscow, to continue to keep its current production curbs in place for another two months.
