The price of oil has decreased and this issue has caused a budget deficit for Saudi Arabia in three months. The incompatibility of the oil price with Bin Salman's dream has affected the Saudi economy, and for this reason, this country will start waiting for bonds to cover its budget deficit.
Saudi Arabia will use bonds for the second time this year as falling oil prices have created a budget deficit.
An informed person told Bloomberg that the largest economy in the Middle East plans to issue Islamic securities with maturities of 6 and 10 years.
The International Monetary Fund has announced that Saudi Arabia suffered a budget deficit in the first quarter of the year due to a slowdown in economic growth and an increase in spending, and there is a possibility that it will face a budget deficit crisis throughout the fiscal year.
Saudi Arabia wants to become one of the top economic powers in the world by 2030, so it has undertaken expensive development programs. This issue has made this country eager for high oil prices. Because of this, the supply of oil by Saudi Arabia and the members of OPEC+ decreased, but the concern of traders about high interest rates and the stagnation of the global economy affected the demand for fuel and the price of oil decreased in the previous month.
The International Monetary Fund's forecast of 1.1 percent of the GDP deficit in 2023 contradicts the expectations of the Saudi government. In its latest estimate, the Saudi government has predicted a budget surplus for the second consecutive year.
Saudi Arabia's dollar-denominated bonds are trading at an average yield of 4.6 percent, according to Bloomberg indices. The kingdom last issued $10 billion in bonds in January.