Radical changes in Saudi fiscal program and oil prices expected amid COVID-19

As the novel coronavirus pandemic has gripped Kingdom of Saudi Arabia, economic and finance experts have predicted radical changes in fiscal program and oil prices.

Media reports said Saudi fiscal program will be more conservative over the medium term to manage the fiscal deficit.

Experts said that international organizations would offer their services to the Kingdom to help it overcome the rare financial crisis resulting from the coronavirus disease (COVID-19) pandemic, coupled with the slump in global oil prices.

The Saudi finance minister, Mohammed Al-Jadaan, said earlier that Kingdom would take draconian measures that might be painful in order to deal with the crisis and pointed out that all options remained open to it.

According to the IMF expert, Al-Jadaan implied moving towards three options for handling the COVID-19 pandemic: Fiscal consolidation, subsidies removal, and increased fees and taxes.

Economic consultants, said one of the challenges facing Saudi Arabia was how to handle the economic crisis and make use of the economic rationalization policies in order to cut down on spending and diversify sources of income.

“The COVID-19 impact will definitely reach the oil prices which will continue to drop as a result on the decrease in crude demand. OPEC+ plays a pivotal role in reducing the losses from oil prices through holding negotiations with OPEC members. This is the only way to reduce the output in the markets and support the crude prices and improve the monetary resources. It is important that the OPEC policies should be followed and adhered to. The advanced countries are the most affected by COVID-19 as their factories have stopped,” said experts.