Reports that Saudi Arabia will launch an international bond provides some clarity on how the budget deficit will be financed over the next year – as things stand, we think around 65% will come from domestic bond issues, 10% from international bond issues and the remaining 25% from reserve drawdown. What’s missing from the fiscal plans so far is a clear strategy to narrow the budget deficit over a 2-3 year horizon. That could come at next month’s budget statement.
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