Saudi Aramaco IPO Before Saudi Arabia Goes Bankrupt

If you were to take Saudi Arabia's religious issues into effect their credit rating should hover on near default.

IPO: Saudi Aramco is valued at $2 trillion. Estimates in 2015 penned the valuation at $10 trillion. Whatever it may be 5% of the group is being listed and the value for that is seen at $100 billion.

Saudi Arabia is scheduled to go bankruptcy in about 5 years. The money will help. This is developing...

From the IMF: Transcript of a Press Briefing On Update Of The World Economic Outlook January 16, 2017

MS. NARDIN: Let's move to our colleagues that are online now. First from Saudi Arabia, and then on Africa. On Saudi Arabia: can you please elaborate on the reasons behind cutting the 2017 forecast even as the expected rise in oil prices provide room for government spending, and what is the forecast for non-oil economy growth in 2017? And another question, if we think the slowdown in Saudi Arabia's economy will impact aid to other countries and investments in the region. 

MR. MILESI-FERRETTI: Well, clearly, Saudi Arabia relies on oil revenues for a very sizable fraction of its exports and its government revenues, and, hence, the impact of lower oil prices on the economy is very strong. And we have seen, indeed, in 2016 a very sharp slowdown in growth. We had growth just of 1.4 percent. The forecast for 2017 depends, of course, on the behavior of both the oil part of the economy and the non-oil part of the economy. As in regard to the oil part of the economy, we have the impact of the agreement between major producers which is an agreement to curtail to some extent oil supply, and hence less oil production is going to mean less output from the oil sector even if prices are a little bit higher. With regard to the non-oil economy, Saudi Arabia is embarking on a very ambitious structural reform program, but also a very sizeable fiscal consolidation because of the decline in oil revenues. So there is a big adjustment in spending downwards. There is an adjustment in taxes upwards, and as a result the non-oil growth is not going to be as buoyant as it was during period of strong oil prices. Clearly, a bit higher oil prices help on the revenue front, but there is a lot of ground to be made in order to close the fiscal deficit that has opened with the decline in oil prices.

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