The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Dilemmas of diversification

Saudi Arabia is making progress in restructuring its economy, but keeping up to speed a move away from dependence on oil itself rests on high oil prices and low interest rates.

High oil prices and low interest rates allows the Saudi government to press ahead with structural reforms.

HIGH OIL PRICES and low interest rates, the traditional preconditions for a strong performance from the Saudi Arabian economy, have enabled the government to press ahead with structural reforms without having to impose the spending cuts that in recent years would have been needed to keep the budget under control. With benchmark oil prices likely to remain nearer $30 a barrel than $20, well above the budgeted average figure of $17 a barrel, and production expected to stay at 9.5 million barrels a day, the revenue side of the budget looks certain to be buoyant this year.

"Oil revenue could be up as much as SR100 billion this year, bringing total oil revenue to SR230 billion and overall revenue to SR280 billion [$73.7 billion]," says Said Al-Shaikh, chief economist at National Commercial Bank.

If the government gets anywhere near its spending target of SR209 billion, the country could produce a rare surplus or balanced budget, something it managed in recent years only in 2001.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree