Saudi Fiscal Deficit More Than Doubles on Regional Turmoil and Reduced Aramco Payments

Saudi Arabia's fiscal deficit more than doubled in the third quarter of 2023 to 84 billion riyals, driven by regional instability from US-Iran tensions and reduced payments from state oil giant Saudi Aramco, which sharply cut oil revenues. Quarterly oil revenues fell nearly 40% sequentially to approximately 116 billion riyals, the lowest since 2020; non-oil revenues also declined about 7%, while overall government spending dropped 8%. Economists noted that with stronger international crude prices and higher Aramco royalty fees, fourth-quarter oil revenues are expected to recover somewhat, but the deficit will still exceed market expectations, with the deficit-to-GDP ratio projected between 5.6% and 6%.