Saudi Arabia's Economy Takes a Strong Hit

[Debater Slayer]

Some good news about the Kingdom of Religious Fascism:

The International Monetary Fund has sharply cut its economic growth forecast for Saudi Arabia.

The organization expects the Saudi economy to grow 0.4% this year, down from a forecast of 2% just three months ago, because of OPEC oil production cuts.

Saudi Arabia and other major oil producers agreed to the cuts in December to ease a glut of supply that had caused prices to collapse.

The drop in oil prices has forced Saudi Arabia to rethink its economic strategy. Last year it announced Vision 2030, a plan to wean its economy off oil.

The kingdom's budget deficit swelled to 366 billion riyals ($98 billion) in 2015, and 297 billion riyals in 2016. It was forced to borrow money from international investors for the first time, raising $17.5 billion in October.

The IMF expects Saudi Arabia to tap the international markets again this year.

Full article: Saudi economy will barely grow this year, IMF says

Hopefully this will slow down or even halt Saudi Arabia's sponsorship of religious extremism both inside and outside its borders without affecting the average citizen too badly.

 

[Shadow Wolf]

Hopefully this will slow down or even halt Saudi Arabia's sponsorship of religious extremism both inside and outside its borders without affecting the average citizen too badly.

We can only hope, but I'm not optimistic enough that they will make significant cuts in training and sponsoring extremists. Regardless of what they do, it's difficult to predict anything that would involve such a drastic paradigm shift in their economy. And economic slumps are known for being a tremendous burden on the lower classes while leaving the upper eschalons barely touched or even better off than before. If anything, I worry it may manifest as income opportunities for the poor.

 

[dust1n]

Hopefully this will slow down or even halt Saudi Arabia's sponsorship of religious extremism both inside and outside its borders without affecting the average citizen too badly.

Well, I'm certainly hopeful that's the case, though I don't really see a government deficit as necessarily translating to that.

 

[YmirGF]

Well, I'm certainly hopeful that's the case, though I don't really see a government deficit as necessarily translating to that.

Exactly. Running a massive deficit hasn't seemed to slow down the American economic machine much. After the Saudi's run out of oil, they can always burn cash for a few decades, LOL.

 

[Revoltingest]

Exactly. Running a massive deficit hasn't seemed to slow down the American economic machine much.

It can seem that way, but we really don't know how our economy would differ without a deficit.
If gov hadn't borrowed the money, there'd be positive effects....
1) No interest to pay
2) No principal to repay
3) No additional taxes to pay towards #1 & #2
4) Less borrowing competition, making more loans available for the private sector.
5) "Starving the beast", ie, government is less inclined to waste money when it must make do with less.

 

[dust1n]

Exactly. Running a massive deficit hasn't seemed to slow down the American economic machine much. After the Saudi's run out of oil, they can always burn cash for a few decades, LOL.

It's not an ideal position to be in, but it by no means an existential crises. If it prolonged a decade, that could be brutal to its stability.

But of all the countries that more or less operate on the basis of nationalized oil economy, Saudi Arabia is probably best equipped and trained well enough to to diversify its economy and handle the eventual decline in demand for oil. It probably won't be deterred, let alone private individuals, from supporting its hardline form of Islam and spreading it to other countries. It's probably more concerned with competing with Iran's influence in its neighboring countries. I mean, it is a monarchy... so you're kind of rolling the dice with your leadership and what ideals or reforms they may pursue. And since they live so long generally... it may be a while.