Sovereign Risk Country Scorecard: Saudi Arabia, Q4 2016
​Saudi Arabia is trapped in a do-or-die situation. The oil price war strategy deployed since Q4 2014 is not bearing fruits as US shale oil producers resist the oil price collapse thanks to continuing capital and debt flows. The violent contraction of oil-related income, fiscal resources and financial assets precipitates initiatives for reforms: downsizing of public sector, development of non-oil revenues, water and energy subsidies cuts. However, because these reforms had always been delayed, the exit from the rentier model carries significant risks: negative short term effect on activity, significant increase of cost of living, destabilization of social relations due to insufficient employability of Saudi nationals. Only an oil price recovery would provide some relief. In parallel, external risks are aggravating due to the switch from a creditor to debtor nation and increasing military involvment at the forefront of the Sunni-Shiite rivalry.
Beyond Ratings is an independent Macro-financial risk services company dedicated to country and Sovereign risks. Our team of experts and analysts builds on our proprietary risk methodology and advanced indicators. Founded in 2014, we assess countries wealth, monitor their economic and financial performance and resilience to global risks, such as energy prices and climate change. Our clients use our services for risk management, investment advisory, financial engineering and reporting requirements. Our clients are pension funds, asset managers, infrastructure funds, development banks, commercial banks and insurers.
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