Saudi government debt on course to surpass 50% of GDP

Saudi Arabia’s government debt has been on an upwards path over the past decade and, with the windfall from the energy shock fading fast, we think it will rise from just over 30% of GDP last year to over 50% of GDP over the next few years and could conceivably hit 60% of GDP by 2030. Further increases in the public debt burden are likely to drive a widening of risk premia on Saudi assets and crowd out lending to the private sector, whilst the government may pursue more aggressive fiscal tightening measures.