Borrowing by Arab governments more than doubled last year and is forecasted to remain high in 2016, according to the ratings agency Standard and Poor’s (S&P).
Last year, Saudi Arabia borrowed $26 billion, and in total, GCC Governments borrowed $40 billion overall. Egypt borrowed the most of any Arab nation with $44 billion.
S&P projects that borrowing by the same Arab nations will drop only six percent to $134 billion in 2016, of which the GCC share will be $45 billion. The 2016 projections are based on the assumption that most GCC countries will draw down on their huge fiscal reserves to finance budget deficits resulting from low oil revenues, the AFP reports.
The gross total commercial debt by Arab governments is forecast to reach $667 billion by the end of this year, up $85 billion on 2015, S&P said.
Revenue challenges will continue for Saudi Arabia with low oil prices. In 2015, total revenue was estimated to decline of 15 percent compared to the budgeted revenues of that year, according to Saudi Arabia’s Ministry of Finance.
