Saudi fiscal reserves slide to 4-year low on weak oil

Saudi Arabia's fiscal reserves dropped to a four-year low last year as the government sought to finance a budget deficit caused by plunging oil revenues, a report said today.
The reserves of the world's largest crude exporter dropped to USD 611.9 billion at the end of 2015, the lowest level since 2011, down from USD 732 billion a year before, the Saudi Jadwa Investment said in an economic report.
Jadwa said it expected reserves to fall to around USD 500 billion by the end of 2016, after oil prices fell by three quarters since mid-2014.
The kingdom, the second largest crude producer after Russia, posted a record budget deficit of USD 98 billion last year after oil income dived by 60 per cent to just USD 118 billion.

Riyadh also projected an USD 87 billion deficit for this year but Jadwa forecast the shortfall to be more than USD 107 billion.
To help finance the budget deficit, the kingdom in December introduced a series of austerity measures raising fuel prices by up to 80 per cent and increasing the prices of electricity, water, natural gas and others.

Jadwa said it expected inflation to soar this year to 3.9 per cent, from 2.2 per cent last year, as a result of the price hikes.
The kingdom also issued bonds in the domestic market worth USD 30 billion.
The International Monetary Fund last month revised downward Saudi gross domestic product growth to just 1.2 per cent this year, the lowest since 2009. Its GDP grew 3.4 per cent in 2015.

Saudi Arabia is currently pumping 10.2 million barrels of crude per day.