Arab Today, arab today tycoon prince assails saudi fiscal policy over deficit
Last Updated : GMT 17:37:21
Arab Today, arab today
Arab Today, arab today

Tycoon prince assails Saudi fiscal policy over deficit

Arab Today, arab today

Arab Today, arab today Tycoon prince assails Saudi fiscal policy over deficit

Saudi billionaire Prince Alwaleed bin Talal
Riyadh - AFP

Billionaire Prince Alwaleed bin Talal has lashed out at the Saudi fiscal policy after projecting the largest ever budget deficit for 2015 following the slump in oil prices.
"We have reached the danger point... after starting to withdraw from the reserves," to meet the budget shortfall, Alwaleed said in a letter addressed to the finance minister.
Last week, the world's biggest crude exporter announced an expansionary 2015 budget with the largest-ever deficit of $38.6 billion.
It projected spending at $229.3 billion, a slight rise from last year's estimates, and revenues at $190.7 billion, sharply down from $228 billion projected in 2014.
Saudi Arabia, the lead producer in the Organisation of the Petroleum Exporting Countries, also said it estimates 2014 actual budget deficit at $14.4 billion as both spending and revenues far exceeded projections.
Alwaleed, a member of the Saudi ruling family and the wealthiest Arab private investor, said Riyadh should not have let spending rise above projections, especially after oil prices began to decline.
Oil income contributes about 90 percent of public revenues in the OPEC kingpin which pumps around 9.6 million barrels per day.
If the government had contained last year's spending within projections, a surplus of at least $50 billion would have been posted, the prince said.
As a result of failing to check rising spending, a total of $53 billion will be withdrawn from fiscal reserves, estimated at $750 billion, in just two years, he said.
Alwaleed also criticised the way Saudi reserves are invested, saying because most of them are invested in US and European bonds, they have low yields at around 2.4 percent annually.
The reserves are currently managed by the Saudi Arabian Monetary Agency, or the central bank.
Alwaleed called for the creation of an independent sovereign wealth fund to invest the reserves and increase the returns to around 7-8 percent.
If oil prices remain at the current level of under $60 a barrel for benchmark Brent crude, Saudi Arabia is expected to lose half of its oil revenues of $276 billion posted in 2013. Oil income in 2014 was estimated at $248 billion.

 

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Arab Today, arab today tycoon prince assails saudi fiscal policy over deficit Arab Today, arab today tycoon prince assails saudi fiscal policy over deficit

 



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