• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 12 hours US top CEO's are spending their own money on the midterm elections
  • 10 hours EU to Splash Billions on Battery Factories
  • 20 hours Petrol versus EV
  • 9 hours The Dirt on Clean Electric Cars
  • 4 mins Satellite Moons to Replace Streetlamps?!
  • 14 hours OPEC Is Struggling To Deliver On Increased Output Pledge
  • 12 hours The Balkans Are Coming Apart at the Seams Again
  • 16 hours 10 Incredible Facts about U.S. LNG
  • 10 hours Uber IPO Proposals Value Company at $120 Billion
  • 1 day E-mopeds
  • 12 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 15 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 1 day These are the world’s most competitive economies: US No. 1
The Dark Horse Of The Oil Price Rally

The Dark Horse Of The Oil Price Rally

Vietnam is set to break…

Oil Price Rally Revives Offshore Oil Sector

Oil Price Rally Revives Offshore Oil Sector

The offshore sector was one…

IMF Warns Saudis Not To Rush Reforms To Offset Low Oil Prices

Saudi Oil

The International Monetary Fund (IMF) praised on Thursday Saudi Arabia’s efforts to implement reforms aimed at countering the effects of low oil prices, but warned Riyadh not to rush reforms and price hikes because doing so would hurt economic growth.

“Given the large drop in oil prices and the expectation that they will not increase significantly over the medium term, fiscal adjustment needs to continue. But it’s important to get the pace of this adjustment right--too quick will unnecessarily hurt growth, but too slow an adjustment will see an undesirably large build-up in debt,” the IMF said.  

According to the IMF, the Saudis are on the right track of fiscal consolidation, but it is probably too rapid.

The international fund is advising authorities to proceed more slowly with reforms and to re-set the target to balance the budget in 2022 rather than in 2019.

In the lower-for-longer oil prices, oil growth is on track and as projected, but the non-oil growth seems weaker, the IMF economists said.

Last month, Saudi Arabia was said to be studying a plan to raise gasoline prices by the end of 2017 to bring them to parity with international prices—which would mean a rise of about 80 percent for octane-91 grade gasoline compared to current prices.

Related: The Trillion Dollar Market That Stopped Chasing Profits

The Saudi economy contracted by 1.03 percent over the second quarter of this year, following a 0.5-percent drop in the first quarter. The economy contraction accelerated because of the country’s participation in the OPEC oil production cut and because of disappointing growth in the non-oil industries.

This is the first time the GDP of the Kingdom has contracted in two consecutive quarters since the latest financial crisis took hold, and it is happening despite government efforts—led by Crown Prince Mohammed bin Salman—to launch the Vision 2030 economic diversification program that is supposed to wean the country off crude.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


x

Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News