IMF sees years of austerity for Saudi Arabia, as debt defaults loom

‘The International Monetary Fund has predicted years of higher taxes and low fuel subsidies for oil-rich Saudi Arabia. As crude prices have fallen more than 70 percent in 18 months, weaker players could soon start to default on debts.

Saudi Arabia will need to stop relying so heavily on oil revenues, which make up more than 80 percent of the government’s wealth, said Masood Ahmed, head of the Middle East department at the IMF.

“This will have to be part of a multi-year adjustment process. There will have to be a major transformation of the Saudi economy. It is necessary, and it is going to be difficult, but it is a challenge which I think the authorities have clearly laid out,” Ahmed told the Telegraph.’

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