DUBAI: S&P Global Ratings said on Monday it expected Gulf countries’ government debt to increase by a record high of about $100 billion this year, as funding needs spike due to the coronavirus crisis and low oil prices.
The ratings agency estimates Gulf Cooperation Council (GCC) countries will register an aggregate central government deficit of about $180 billion, to be financed with $100 billion of debt and an $80 billion draw-down in government assets.
“Based on our macroeconomic assumptions, we expect to see GCC government balance sheets continue to deteriorate up until 2023,” it said in a statement.
It based its forecasts on an average Brent oil price of $30 per barrel for the rest of 2020, $50 in 2021 and $55 from 2022.
Gulf countries have been hit hard by the pandemic and lower oil prices have exacerbated that, with most countries expected to post double-digit fiscal deficits this year.
Saudi Arabia, Qatar, Bahrain and the emirates of Abu Dhabi and Sharjah have already borrowed tens of billions of dollars this year to bolster state coffers.
S&P estimates GCC central government deficits to reach about $490 billion cumulatively between 2020 and 2023.
Since the oil price crash in 2014-2015, Gulf states have relied heavily on debt financing, raising over $90 billion in local and international debt in 2016 and 2017.
After a new record high of about $100 billion this year, S&P expects total debt issuance to decline to around $70 billion by 2023.
Oman, one of the financially weakest countries in the Gulf, has not raised international debt yet this year but S&P expects it to do so in the coming months.
Kuwait is planning to raise up to $16 billion by the end of its current fiscal year, ending in March 2021, but its ability to borrow depends on parliament approving a long-debated new debt law.
S&P: GCC government debt to surge by record-high $100 billion this year
https://arab.news/442a7
S&P: GCC government debt to surge by record-high $100 billion this year
- S&P estimates GCC central government deficits to reach about $490 billion cumulatively between 2020 and 2023
- Since the oil price crash in 2014-2015, Gulf states have relied heavily on debt financing
Saudi POS spending jumps 28% in final week of Jan: SAMA
RIYADH: Saudi Arabia’s point-of-sale spending climbed sharply in the final week of January, rising nearly 28 percent from the previous week as consumer outlays increased across almost all sectors.
POS transactions reached SR16 billion ($4.27 billion) in the week ending Jan. 31, up 27.8 percent week on week, according to the Saudi Central Bank. Transaction volumes rose 16.5 percent to 248.8 million, reflecting stronger retail and service activity.
Spending on jewelry saw the biggest uptick at 55.5 percent to SR613.69 million, followed by laundry services which saw a 44.4 percent increase to SR62.83 million.
Expenditure on personal care rose 29.1 percent, while outlays on books and stationery increased 5.1 percent. Hotel spending climbed 7.4 percent to SR377.1 million.
Further gains were recorded across other categories. Spending in pharmacies and medical supplies rose 33.4 percent to SR259.19 million, while medical services increased 13.7 percent to SR515.44 million.
Food and beverage spending surged 38.6 percent to SR2.6 billion, accounting for the largest share of total POS value. Restaurants and cafes followed with a 20.4 percent increase to SR1.81 billion. Apparel and clothing spending rose 35.4 percent to SR1.33 billion, representing the third-largest share during the week.
The Kingdom’s key urban centers mirrored the national surge. Riyadh, which accounted for the largest share of total POS spending, saw a 22 percent rise to SR5.44 billion from SR4.46 billion the previous week. The number of transactions in the capital reached 78.6 million, up 13.8 percent week on week.
In Jeddah, transaction values increased 23.7 percent to SR2.16 billion, while Dammam reported a 22.2 percent rise to SR783.06 million.
POS data, tracked weekly by SAMA, provides an indicator of consumer spending trends and the ongoing growth of digital payments in Saudi Arabia.
The data also highlights the expanding reach of POS infrastructure, extending beyond major retail hubs to smaller cities and service sectors, supporting broader digital inclusion initiatives.
The growth of digital payment technologies aligns with Saudi Arabia’s Vision 2030 objectives, promoting electronic transactions and contributing to the Kingdom’s broader digital economy.
