Citigroup Chief Economist Middle East Farouk Soussa weighs in on the Saudi Arabian corruption crackdown. He speaks on “Bloomberg Markets: Middle East.”
As the Saudi probe winds down, how will the government coffers make use of the expected $100bn netted from detainees?
“It won’t affect the budget numbers because we know what the budget looks like,” said Soussa.
“These funds will be directed to a seperate committee to contribute towards social projects from outside the budget.”
But with Brent hovering at $71 today, what fiscal changes will Gulf countries undertake?
“The immediate impact for Gulf countries is more money coming in, and the tone of conversation heard is expansion, spending, growth and not fiscal consolidation,” said Soussa.
“The down side is that governments who are now motivated by higher oil higher don’t see the urgency to remain vigilent towards policies, and that’s a negative.”