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2016-09-07 18:45:00

SAUDI CUTS DEFICIT $20 BLN

SAUDI CUTS DEFICIT $20 BLN

BLOOMBERG wrote, Saudi Arabia is intensifying efforts to shrink the highest budget deficit among the world's biggest 20 economies, aiming to cancel more than $20 billion of projects and slash ministry budgets by a quarter, people familiar with the matter said.

The government is reviewing thousands of projects valued at about 260 billion riyals ($69 billion) and may cancel a third of them, three people said, asking not to be identified as the discussions are private. The measures would impact the budget for several years, according to two of the people.

A separate plan includes merging some government ministries and eliminating others, two people said, also speaking on condition of anonymity.

The world's biggest oil exporter is taking unprecedented steps to rein in a budget shortfall that ballooned to 16 percent of gross domestic product last year, curtailing fuel and utility subsidies as well as cutting billions of dollars in spending. The International Monetary Fund expects the shortfall to drop to below 10 percent of GDP in 2017.

Economic Shakeup

The Finance Ministry declined to comment, while officials at the Ministry of Economy and Planning weren't available for comment when contacted by Bloomberg. Several senior government officials are accompanying Deputy Crown Prince Mohammed bin Salman on an Asian tour.

"The revenue and economic diversification strategy being pursued will only start to yield results over the medium- to long-term," Raza Agha, VTB Capital's chief economist for the Middle East and Africa, said by e-mail. "In the short term, it is a question of living with lower oil prices by cutting some capital spending, and financing what's left via debt sales and drawing down foreign reserves."

The benchmark Tadawul All Share Index fell 0.2 percent at the close in Riyadh. The measure has dropped 17 percent over the past 12 months.

Prince Mohammed is leading plans for the biggest economic shakeup in the kingdom's history to reduce the economy's reliance on oil after the plunge in crude prices. His blueprint includes selling a stake in oil giant Aramco and creating the world's biggest sovereign wealth fund.

In the meantime, however, efforts to repair public finances are slowing the expansion of the biggest Arab economy, with non-oil gross domestic product contracting in the first quarter of this year.

"Much lower government spending will translate into lower private sector growth, which is already started to be seen in economic indicators this year," said John Sfakianakis, director of economic research at the Gulf Research Center. "It's a double edged sword as the government has to rationalize spending because of the drop in oil revenues."

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Earlier: 

БЫСТРЕЕ СБАЛАНСИРОВАТЬ РЫНКИ 

SAUDI & RUSSIA COOPERATION 

РОССИЯ И САУДОВСКАЯ АРАВИЯ ДОГОВОРИЛИСЬ 

SAUDI RAISED PRICES 

OIL PRICE COMPROMISE

 

 

 

 

 

 

Iran's oil minister Bijan Zanganeh has offered cautious backing to plans to cap production at a meeting of major producers this month, saying he wanted to see prices between $50 and $60 a barrel.

Following a meeting with Opec's new secretary general Mohammed Barkindo, who has been trying to shore up backing for the plan, Mr Zanganeh said Tehran backs any measure aimed at stabilising the oil market, according to comments carried by state TV, writes David Sheppard, Deputy Commodities Editor.

"Iran wants a stable market and therefore any measure that helps the stabilisation of the oil market is supported by Iran," Mr Zanganeh said. "We support oil prices between $50 and $60 per barrel."

His comments stopped short of confirming Iran would join the output freeze plan, but the conciliatory tone may boost hopes for an agreement in Algiers later this month.

Iran's refusal to join a similar plan in April led Saudi Arabia, its chief regional rival, to scuttle the Doha-based talks. This time, however, Iran has agreed to attend the meeting, which is being held on the sidelines of the International Energy Forum on September 26-28.

On Monday, Saudi Arabia and non-Opec member Russia signed a pact to cooperate to stabilise markets, saying they could agree to freeze output in the future. Iran's status remains a possible sticking point for Saudi Arabia, however.

Iran has long argued that it cannot cap production while its exports are recovering from years of western sanctions, which were only lifted in January. But its production has risen since April and it is now within touching distance of the approximately 4m barrel a day level most analysts think it is targeting in the short run.

Russian president Vladimir Putin on Monday said Iran should be given leeway given its lost exports under sanctions. Saudi Arabia's oil minister, Khalid al Falih, indicated however he believed Iran's production was already high enough.

The decision may come down to Saudi Arabia's powerful deputy crown prince, Mohammed bin Salman, known as MBS, who is said to have been behind Riyadh's decision to abandon the freeze plan five months ago.

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Earlier:

IRAN: 

БЫСТРЕЕ СБАЛАНСИРОВАТЬ РЫНКИ 

IRANIAN POSITIVE SIGNALS 

IRAN & INDONESIA AGREEMENT 

SAUDI - IRAN COMPETITION 

IRAN NEED $50 BLN

 

PRICE: 

SAUDI & RUSSIA COOPERATION 

OIL PRICES: ABOUT $48 

РОССИЯ И САУДОВСКАЯ АРАВИЯ ДОГОВОРИЛИСЬ 

SAUDI RAISED PRICES 

OIL PRICE COMPROMISE

 

Tags: SAUDI, OIL, PRICE

Chronicle:

SAUDI CUTS DEFICIT $20 BLN
2018, July, 16, 10:35:00

CHINA'S INVESTMENT FOR NIGERIA: $14+3 BLN

AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.

SAUDI CUTS DEFICIT $20 BLN
2018, July, 16, 10:30:00

LIBYA'S OIL DOWN 160 TBD

REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.

SAUDI CUTS DEFICIT $20 BLN
2018, July, 16, 10:25:00

BAHRAIN'S GDP UP 3.2%

IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.

SAUDI CUTS DEFICIT $20 BLN
2018, July, 16, 10:20:00

NIGERIA'S GDP UP 2%

IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.

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