Low oil prices pressure Gulf budgets
In depth
Issue 987
- 19 Feb 2015
| 6 minute read
When King Salman Bin Abdelaziz came to power in Saudi Arabia, he wasted little time in taking some expensive decisions (GSN 986/1). Along with a two-month salary bonus for state employees came handouts to students and sports clubs, and other measures. In all, the spending spree is estimated by ratings agency Standard & Poor’s (S&P) to have cost some SR110bn ($29bn). Such gestures are a traditional way for Gulf rulers to buy loyalty and suppress dissent, but their ability to continue with this approach is being tested by the ongoing slump in oil prices. Across the region, governments are facing sharp falls in revenues this year.
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