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Saudi public debt & sukuk in a time of COVID-19 and low oil price
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SAUDI public debt & sukuk in a time of COVID- 19 and low oil price
The volatility in crude oil market dynamics is matched only by the volatility in the politics of oil especially between two of the largest pro- ducers in the world - Saudi Arabia and Russia, with another, the US, feigning to play the role of a self-interested broker and facilitator.
The toing and froing from production hikes in March to record cuts agreed on April 9 at an OPEC+ meeting with the Kingdom, according to Saudi sources, agreeing to cut back its out- put from 12mn barrels per day (bpd) to just under 8.7mn bpd and Russia from 10.4mn bpd to around 8.4mn bpd, has merely served to contribute to market uncertainty with Mex- ico threatening to opt out of any such deal and America’s favourite pariah states Iran and Ven- ezuela (boasting the world’s largest proven oil reserves) subject to US sanctions.
Whoever advised Saudi strongman Prince Muhammed bin Salman (MBS) in pursuing the kingdom’s current seemingly chaotic and
contradictory oil policy must have a Machia- vellian streak in him. The UN Department of Economic & Social Affairs in early April, for instance, warned that, “The global economy could shrink by almost 1% this year - 0.9% - due to the COVID-19 pandemic, instead of growing at a projected 2.5%.”
World output could contract further if imposed restrictions on economic activities and lock downs extend to the third quarter this year and if fiscal responses introduced by countries across the world to mitigate the socio-economic impact of COVID-19 fail don’t work things could get worse still.
The multifaceted crisis will have a big impact on Saudi Arabia’s public debt strategy and its socio-political structures – much more so than in other countries.
To read the rest of this article click here
https://newsbase.com/story/saudi-public-debt- and-sukuk-in-a-time-of-covid-19-and-low-oil- prices-180948™
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w w w . N E W S B A S E . c o m Week 15 15•April•2020