Saudi Arabia’s public debt is expected to shoot up to SAR159.3 billion by the end of the current year from SAR44.3bn by the end of 2014.
The major hike in the country’s debt is driven by the multi-billion bonds the government issued in 2015 to finance the budget deficit, according to any analysis by Al Eqtisadiah paper.
This year, the Saudi government issued bonds worth SAR115bn, the analysis reveal. However, the Kingdom’s debt comprises only 5.7 per cent of this year’s gross domestic product, which, at current prices, is estimated at SAR2.8 trillion.
In 2014, the country’s public debt made up 1.6 per cent of its GDP while it was 2.2 per cent in 2013 and 3.6 per cent in 2012, the data shows.
According to the analysis, the Saudi government sought, by releasing government-guaranteed bonds, to maintain its hefty spending on mega public ventures.
It also sought to ease pressure on the country’s reserves after withdrawing SAR246bn in the first six months of the current year.
By the end of June, Saudi Arabia reserves slumped to SAR659bn from SAR905bn at the end of 2014.
(SAR1 = AED0.97, at the time of publishing)