Riyadh: Saudi Arabia’s net foreign assets dropped to $640 billion (Dh2.34 trillion) in October, the lowest level in three years as the oil rout strains government finances in the biggest Arab economy.
Net foreign assets held by the Saudi Arabian Monetary Agency fell 1 per cent in October, according to central bank data released on Thursday. The reserves have plunged more than $95 billion since peaking at an all-time high of $737 billion in August 2014.
The economy of the world’s largest oil exporter is coming under pressure after oil prices tumbled more than 40 per cent over the past year, pushing authorities to search for savings and sell bonds for the first time since 2007. The International Monetary Fund predicts a budget deficit exceeding 20 per cent of economic output this year, and says at that rate Saudi savings would run out after five years.
“The key challenges are our over-dependence on oil and the way we prepare and spend our budgets,” Deputy Crown Prince Mohammed bin Salman told The New York Times in an interview published on Wednesday. The government is planning reforms including subsidy cuts, the privatisation and taxation of mines and a turn to nuclear and solar power to reduce domestic oil consumption, he said.
