The fact that the fall in oil prices will cause Saudi Arabia’s government to run a large budget deficit has prompted suggestions that it might have to shift oil policy to prop up prices. But the current account deficit is likely to play a larger role than the budget deficit in determining Saudi Arabia’s tolerance for low oil prices. Viewed this way, Saudi Arabia can live with low oil prices for several years.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services