00:00Give us a run through of some of the numbers in this pre budget for this year for Saudi Arabia. Good morning Jen. So yes the deficit as Stuart has alluded to just a few
00:12moments ago has come in wider than expected actually almost double what the initial estimates by Saudi Arabia were last year. That's at about 5.3 percent of gross domestic
00:22product or about 245 billion rials. The equation is simple right. Spending came in higher than expected a little bit higher than expected
00:33and revenue is a little bit lower than expected. And that equation is also you know simple if you want to look at it the hindsight. It's
00:40practically a product of lower oil prices. Now Saudi has been going on this major diversification push over the past eight years
00:50and it's seen massive progress. For example we know that the non-oil industry is contributing to more than half to to real GDP in
00:59Saudi Arabia. But still oil is a determining factor. I bring back what Stuart said about the break even oil price. Now the fiscal break
01:07even oil price for Saudi Arabia according to our Bloomberg economics team is at ninety four dollars a barrel. That goes up to one hundred and
01:16eleven. If spending by the P.I.F. that's the Saudi sovereign wealth fund is taken into account. And as we have mentioned Brent right now is
01:26at an average of sixty five dollars a barrel. It's down 10 percent for the year. We've seen the story about the OPEC you know
01:34opening bringing back some supply into the market. That's bound to have some impact on on prices. So it's not a good story for Saudi Arabia. But the
01:42expectation for a deficit and the doubling of the deficit to five point three from an estimate of just above two percent
01:48earlier has been widely expected by the IMF by economists. And so Saudi has really sort of stuck to it to the estimates that
01:58external institutions have put through. What does this mean a beer for the coming years. We were just showing a chart for some of the
02:06expectations. What insight can you give into that. So the deficits are expected to run through until twenty twenty eight.
02:15They're expected to lessen into into you know the next three years. We know that that is gonna happen. But what what we know
02:24about next year is that Saudi has sort of put its fiscal discipline goals. It's it's put it through until next year. We know that
02:32it's increased spending a little bit this year for you know the full year twenty twenty five budget. Twenty twenty six. It's
02:39planning to reduce spending. And that's a good sign. Right. Everyone. Every external institution economists analysts
02:45analysts have been calling for Saudi Arabia to reduce its spending and rationalize. Again I mentioned this word quite a bit when I
02:53talk to you guys. But rationalize spending especially on the giga projects. We've written multiple stories about neon. We've written
03:00multiple stories about you know the sort of rationalization that is happening there. And that is seen as a positive sign by the
03:07market. And society has to put in more work towards that more work towards rationalization and towards reducing spending. That's a
03:14little bit contested by some of the economists that we have spoken to who say actually reducing spending by as much as Saudi is
03:22predicting might not actually be doable. But we have next year to see.
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