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The government’s “newfound caution” is once again making the rounds, with Bloomberg highlighting the six stress points that it says are testing the economy. It argues that cutbacks in domestic spending are in the cards amid declining oil revenues on the back of Opec+ production cuts as the diversification drive contributes to budget deficits and rising debt.
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It’s all about oil: “The biggest obstacle facing Saudi Arabia continues to be its unwaning reliance on oil. Although the kingdom has tried to lift prices through Oopec+, supply coming from elsewhere hindered that effort. Authorities need to spend to keep the economy ticking and the population happy, but maintain enough restraint to contain the budget deficit,” Bloomberg Economic’s chief emerging-markets economist Ziad Daoud said.
REMEMBER- A Bloomberg piece last week suggested that a government committee led by Crown Prince and Prime Minister Mohammed bin Salman is wrapping up a review of mega projects such as Neom, which could see budgets trimmed.
This isn’t unexpected: While the government has been saying since last fall that it would run modest deficits to push ahead with gigaprojects, it has also signaled that some of the projects are “modular” and could be paced-out beyond 2030. What’s clear is that officials aren’t backing away from the diversification drive and its emphasis on large-scale projects — instead, they’re likely to pick which will push full-steam ahead, and which will build out at a slower pace.
MEANWHILE- Warming Saudi-Chinese ties are also turning heads: European online magazine Modern Diplomacy has taken note of China’s growing influence in the region and what it could mean to the US. It says that Washington should work on reassuring its regional allies, including Riyadh, on security assurances that Beijing will never be able to fulfill. This comes as officials in Beijing discussed last week ramping up trade and investment with Saudi in a sign of a growing interest in the region — and as we wait here for word of what’s next on an expected security, nuclear, and technology cooperation pact with the US.
AND- Another day, another Esports story: Bloomberg has rolled out an opinion piece on gender pay disparity in Esports on the sidelines of the inaugural Esports World Cup. The columnist claims that the event’s record-breaking USD 60 mn purse is not equally distributed between male and female players.
