Impact of OPEC and Allies’ Decision on Saudi Arabia’s Budget: International Monetary Fund Analysis
The International Monetary Fund said that Saudi Arabia would benefit more from the kingdom’s announced production cuts with OPEC and its allies, as it would receive more revenue from rising oil prices.
“The impact on the budget and the external situation relative to what we expected is positive, so the impact on prices will offset the losses that may arise from production,” said the head of the IMF mission in the kingdom, Amin Mati. Washington.
Oil prices rebounded after the banking crisis that swept the markets and pushed black gold prices to their lowest level in 15 months in mid-March, as well as after the unexpected decision taken by the OPEC+ countries to reduce daily production by more than a million barrels. since the next month, it has stabilized, in April Brent oil is above 85 dollars per barrel.
The Kingdom of Saudi Arabia, the world’s largest oil exporter, has announced a voluntary production cut of 500,000 barrels per day starting May next year.
Saudi Arabia’s oil revenue reached almost $326 billion last year, a near-record increase, combined with strong production, making the Saudi economy the fastest growing in the G-20. This helped the Saudi government run a budget surplus for the first time in almost a decade.
The International Monetary Fund expects Saudi Arabia’s economic growth to slow to 3.1% this year and next from around 9% in 2022 following a sharp improvement in expectations for 2023 as a result of one of the Fund’s biggest positive developments in its latest global forecasts .
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