House Of Cards -- Shifting Sands -- House In Extremis -- December 16, 2020

I track the House of Saud here. 

From The WSJ here: Saudi Arabia reins in spending to contain deficit.

I first started talking about this several  years ago when Saudi Arabia canceled its plans to install solar power because they couldn't afford to do it. No one was talking about it. LOL. But here we go. Better late than never. 

From the linked article:

Saudi Arabia plans to spend less next year to rein in a pandemic-induced budget deficit, pursuing austerity even as a rally in oil prices signals a higher demand for crude and a global economic recovery.

The Saudi government expects to trim its budget deficit from 12% of economic output this year to 4.9% in 2021, as it lowers spending by about 7% to 990 billion Saudi riyals, equivalent to $264 billion, the country’s Finance Ministry said Tuesday. State revenues are forecast to grow nearly 10% to 849 billion riyals on higher taxes and oil revenues.

Saudi Arabia’s budget announcement is a closely watched measure of spending in the wider Gulf region and an indicator of Riyadh’s expectations on the direction of oil prices. Crown Prince Mohammed bin Salman is expected to face a tricky economic balancing act next year as the kingdom’s de facto ruler will have to cut spending on some projects related to his plan to diversify the economy yet still try to create jobs for his young population.

When I saw this report earlier, from a different site, what surprise me most was how small the Saudi Arabian budget really is: less than $300 billion. Are you kidding me. That's it. And that will still result in another deficit. 

$300 billion annual budget. 

I can't put my arms around $300 billion; for some perspective, annual budgets for:

• New York City: $90 billion (pre-Covid: $85 billion)
• New York state: $150 billion
• Florida: $90 billion
• California: $200 billion
• Apple free cash flow: $70 billion
• Amazon free cash flow: $15 billion
• 2011: Saudi bought 84 F-15s from the USA for $30 billion

The Saudis' American shopping spree: F-15s, helicopters, and more: November 12, 2020 -- link here. 

Unlike the US, the Saudis can't "print money."