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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
SAUDI CUTS DEFICIT $20 BLN October, 15, 12:30:00

OIL PRICE: NEAR $81 ANEW

SAUDI CUTS DEFICIT $20 BLN October, 15, 12:25:00

BAD BOYS: IMF & WBG

SAUDI CUTS DEFICIT $20 BLN October, 15, 12:20:00

U.S. - CHINA NUCLEAR POLICY

SAUDI CUTS DEFICIT $20 BLN October, 15, 12:15:00

U.S. - CHINA NUCLEAR SANCTIONS

SAUDI CUTS DEFICIT $20 BLN October, 15, 12:10:00

IRAN SANCTIONS DOWN

SAUDI CUTS DEFICIT $20 BLN October, 15, 12:05:00

IRAN - S.KOREA OIL DOWN ANEW

All Publications »

Chronicle:

SAUDI CUTS DEFICIT $20 BLN
2018, October, 15, 12:01:00

GAZPROM - SHELL: BALTIC LNG

GAZPROM - The parties discussed relevant issues related to bilateral cooperation, including the Baltic LNG project. Emphasis was placed on the priority measures aimed at developing a joint design concept (pre-FEED).

SAUDI CUTS DEFICIT $20 BLN
2018, October, 15, 12:00:00

U.S. RIGS UP 11 TO 1,063

BHGE - U.S. Rig Count is up 11 rigs from last week to 1,063, with oil rigs up 8 to 869, gas rigs up 4 to 193, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 13 rigs from last week to 195, with oil rigs up 8 to 127 and gas rigs up 5 to 68.

SAUDI CUTS DEFICIT $20 BLN
2018, October, 12, 11:40:00

OIL PRICE: NEAR $81

REUTERS - Brent crude futures had risen $1.02 cents, or 1.3 percent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown. U.S. West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 percent, at $71.77 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent drop this week.

SAUDI CUTS DEFICIT $20 BLN
2018, October, 12, 11:35:00

OIL PRICES 2018 - 19: $74 - $75

EIA - Brent crude oil spot prices averaged $79 per barrel (b) in September, up $6/b from August. EIA expects Brent spot prices will average $74/b in 2018 and $75/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.

All Publications »