Saudi Arabia: revisiting the hit from lower oil prices

Saudi Arabia’s upcoming Eurobond issuance has thrust the country’s finances back under the spotlight. Overall, the hit from lower oil prices has been significant – annual oil export revenues are down by around US$200bn – but large savings and a low debt level mean the government can afford to prolong the adjustment. We think the authorities will continue to rely on fiscal austerity, combined with reserve drawdown and, increasingly, bond sales.