Saudi 2018 budget unveils modest fiscal loosening

The Saudi budget released this afternoon showed that the government has already started to loosen fiscal policy and will continue to do so in 2018. This is a more accommodative stance than we had expected and so we have revised up our GDP growth forecasts for 2018, from 0.8% to 1.5%. That said, the budget is likely to disappoint those who were hoping for substantial policy loosening to support the economy.