Saudi Arabia’s budget deficit is likely to reach an eye-watering 17.5% of GDP this year and the government has now turned to the bond market in order to help plug the gap. Some have argued that debt issuance is aimed at slowing the pace at which the government draws down its reserves. But we would argue that it has more to do with supporting the development of the bond market, which is expected to be opened up to foreign investors in the near-future.
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