Saudi media say the latest official figures show that the kingdom’s total debts will increase four folds in the near future – what is expected to further add to the economic woes of Riyadh.
The Al Eqtisadiah newspaper has said in a report that the overall value of the bonds that Saudi Arabia has sold is expected to increase from 44.3 billion riyals in 2014 to 159.3 billion riyals for 2015.
Saudi Arabia’s total debt currently stands at about 5.7 percent of its gross domestic product (GDP) and concerns are already rising that if the GDP fails to rise, the kingdom’s debts will see a fresh surge.
In 2014, the debts stood at 1.6 percent of the GDP and in 2013 it stood at 2.2 percent.
Saudi Arabia is currently facing a budget deficit for the first time since 2009. It comes on the back of sliding crude prices, with oil sales accounting for almost 80 percent of the country’s revenues.
The International Monetary Fund (IMF) said in a recent report that Saudi Arabia will have a budget deficit of 21.6 percent in 2015 and 19.4 percent in 2016.
The IMF also warned that Saudi Arabia might go bankrupt within the next five years if the government fails to change its current faulty monetary plans. It specifically emphasized that Riyadh will need to adjust spending.
There have been other reports that the kingdom has already made major withdrawals from its foreign reserves to make up for the shortfalls in its state budget.
A total of withdrawal of $88 billion is believed to have taken place since January 2015 and more could be on the way over the next few months in light of the plunging oil prices.
Also, there have been indications that companies working on infrastructure projects in Saudi Arabia have not been paid for six months or more as the country is trying to cut the cost of contracts in order to save cash, the media reported earlier this month. Analysts have warned that such delays could push up the employment rate in the kingdom to record highs.