SAUDI: Deficit rises to $29bn in Q2 but underlying fiscal performance looks okay

GULF COUNTRIES - Report 29 Jul 2020 by Rory Fyfe and Justin Alexander

​Aramco drew on its cash reserves to pay a large dividend, so oil revenue fell by less than exports. Spending continued to fall as ongoing consolidation exceeded stimulus measures, including cuts in social benefits and the military. Even so, the deficit tripled q/q to $29.1bn. Part of the reason was a three-month tax deferral in many non-oil taxes. Q3 revenue will be better due to higher oil prices, higher VAT and those deferred taxes.

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