Saudi Arabia prepared to absorb crude price shock

MUSCAT: Saudi Arabia is wellequipped to handle the challenges of the current economic situation and despite lower oil prices, to date, major projects in the Kingdom remain largely unaffected, said a section of experts.

The situation of the economy in Saudi Arabia has become the subject of conversation among the public as a result of the considerable drop in oil prices, leading some to predict a future slowdown in the market particularly in the construction industry.

Construction summit

However, key market data shows that the country can handle the decline in oil prices as explained during the Leaders in Construction Summit held in Riyadh on October 26 at the Marriott Riyadh where a number of experts and high profile industry leaders convened to discuss the current situation.

David Clifton, regional development director at Faithful+Gould, delivered a presentation on the economic overview of the Kingdom and the impact of oil prices on current projects and projects in the pipeline.

With the recently released IMF (International Monetary Fund) report predicting Saudi Arabia could go broke within five years as a result of a potential fiscal deficit of 21.6 per cent, the concern is that the low oil prices will deplete an estimated $360 billion from the region this year alone. According to the IMF, Saudi must sell its oil at $106 to balance its budget.