Saudi Arabia turns to international bond markets to plug shortfall

Reports that Saudi Arabia will launch an international bond provides some clarity on how the budget deficit will be financed over the next year – as things stand, we think around 65% will come from domestic bond issues, 10% from international bond issues and the remaining 25% from reserve drawdown. What’s missing from the fiscal plans so far is a clear strategy to narrow the budget deficit over a 2-3 year horizon. That could come at next month’s budget statement.