São Paulo – The decline in global prices in the world, which dropped close to 50% since last year, should lower Saudi Arabia’s fiscal and exports revenues in 2015. That’s the conclusion of the report of the International Monetary Fund (IMF) released this Wednesday (9th).<\/p>\n
According to the document, the Gross Domestic Product (GDP) of the Arab country, which increased 3.5% in 2014, should grow 2.8% in 2015 and 2.4% in 2016. According to the IMF, the decline in oil prices is already “resulting in substantially lower export and fiscal revenues”. <\/p>\n
In 2014, export revenues of Saudi Arabia totaled US$ 343.3 billion, of which US$ 285.2 billion came from oil and refined products. For 2015, the forecast points to a US$ 236.2 billion in revenues with external sales, with the amount resulting of oil and its by-products exports at US$ 183.7 billion. <\/p>\n
According to the report, IMF’s board noted that the sharp drop in oil revenues and continued expenditure growth would result in a very large fiscal deficit this year and over the medium term, eroding the fiscal buffers built up over the past decade. The Fund says that the Saudi government should register a fiscal deficit of 19.5% of the GDP this year.<\/p>\n
Against this background, says the report, the executives underscored the need for a gradual but sizable multi-year fiscal adjustment based on a mix of expenditure and revenue measures.<\/p>\n
These measures, says the report, should include comprehensive energy price reforms, firm control of the public sector wage bill, greater efficiency in public sector investment and an expansion of non-oil revenues. <\/p>\n
For the IMF, the decline in oil prices has increased the importance of Saudi Arabia to promote structural reforms to switch the focus of growth away from the public sector and toward the private sector. <\/p>\n
The Fund points out that unemployment rate among national is still high and that the working-age population is growing strongly. Therefore, the government is continuing to focus of reforms that aim to increase the employment of nationals in the private sector and diversify the economy away from its reliance oil. <\/p>\n
*Translated by Sérgio Kakitani<\/strong><\/p>\n