The Saudi Arabian economy is sputtering back to life after a sluggish couple of years. This sentiment, at least, is the consensus view among senior banking and private sector leaders in Riyadh. Backed by an expansionary 2018 budget of almost SR1000bn ($267bn), as well as an improving oil price environment, the government expects economic growth to reach 2.8% for 2018.
But this improving economic outlook is coming at the expense of fiscal discipline. Rating agency Moody’s expects the country to experience a budget deficit equivalent to 7.6% of gross domestic product in 2018, while the authorities have had to push back their target for a balanced budget from 2020 to 2023.
