Riyadh-based Jadwa Investment recently released an updated analysis on Saudi Arabia’s economy, painting a gloomy picture of the Kingdom’s economic health in the face of low oil prices.
The Saudi economy will continue to slow in 2016 as the private sector gradually adjusts to the new norm of fiscal deficits and lower spending announced by the government, Jadwa said.
As oil prices fall year-on-year in 2016, the fiscal deficit will remain in double digits, but the government will push to gradually diversify its revenue base and consolidate its spending.
For the first time since 2002, a cut in total spending has been budgeted for 2016. A narrower gap between budgeted and actual expenditures, leading to a deficit of $107 billion, is expected the bank said.
