Saudi Arabia’s upcoming international bond issuance and the recent OPEC agreement have put the spotlight back on to the country’s adjustment to low oil prices. One point that is often overlooked is that the government has made significant progress on fiscal consolidation and the majority of spending cuts have already happened. Accordingly, we think the pace of austerity is likely to be eased in 2017-18, which should allow the non-oil sector to embark on a slow recovery.
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