Saudi Arabia: Just how deep are its troubles?

Source: BBC

Economic conference delegate in front of a portrait of Saudi Crown Prince Mohammed bin Salman in Riyadh (file photo)

Once famous for being tax-free, Saudi Arabia has announced it is trebling its Value Added Tax (VAT) from 5% to 15% and cancelling the monthly living subsidy from next month.

The moves come as global oil prices have crashed down to less than half what they were a year ago, slashing government revenues by 22% and putting major projects on hold.

Saudi Aramco, the state oil company, has already seen its net profit fall by 25% in the first quarter of this year, mainly due to the collapse in crude oil prices.

“These measures reflect a drastic need to rein in spending and to try to stabilise weak oil prices,” says Gulf analyst Michael Stephens. “The Kingdom’s economy is in a terrible state and it will take some time to recover any sense of normality.”

More:

Categories: Asia, Saudi Arabia

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.