Saudi expects a budget deficit of $50 billion as Aramco IPO looms


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Saudi expects a budget deficit of $50 billion as Aramco IPO looms

On Thursday, the 31st of October 2019, in the face of a falling crude oil price hurting Saudi’s core source of revenue, the oil-rich Kingdom’s Finance Minister, Mohammad al-Jadaan, said in a press briefing that the Kingdom of Saudi Arabia was expecting its budget deficit to increase to more than $50 billion or 187 billion Saudi Riyals next year, 6.5 per cent of the OPEC Kingpin’s entire GDP (Gross Domestic Product), from an earlier projection of 4.7 per cent of the nation’s entire GDP.

Aside from that, at Thursday’s (October 31st) press briefing, Saudi Finance Minister, al-Jadaan added that the country’s revenue would likely to be pummelled to 833 billion Saudi Riyals next year, 13.2 per cent lower from an earlier projection of 917 billion Saudi Riyals in revenue, which would likely to weigh on a planned IPO of Saudi Arabia’s state-owned oil giant Aramco.

In point of fact, latest comments from the Saudi Finance Minister came forth at a critical time, when Saudi Crown Prince Mohammed bin-Salman had been vying to convince potential investors for a $2 trillion IPO valuation of the Saudi Aramco amid a rapid decline of oil price and lack of effort from OEPC+ nations to ramp up crude oil price futures, nonetheless, a US crude oil price below $40 per barrel could not proffer profits for US refiners, which seemed to be a bitter truth for Saudi behind OPEC+ nations’ reluctance on much-stiffer output curb to spike crude oil price above $60 per barrel, a minimum requirement for Saudi Aramco to pay its promised dividend of $75 billion by next year.