The Reports of Saudi Arabia’s Death Have Been Greatly Exaggerated
The collapse in oil prices, which have more than halved from their previous peaks, has not been painless for Saudi Arabia. However, it’s far too soon to start writing the kingdom’s obituary: Its economy is far better insulated now than it was during the slump of the 1980s and 1990s, when oil reached below $10 a barrel in 1998. Although spending increased in the oil boom years of the 2000s, Saudi Arabia saved quite a bit of money during this time. Cash reserves as a ratio of GDP reached close to 100 percent in 2014. Saudi Arabia will not incur a fiscal or currency crisis of any sorts for the next few years. Its balance sheet has recently made tremendous improvements.
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