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Financing the Gaps

In: Saudi Government Revenues and Expenditures

Author

Listed:
  • Abdulaziz M. Aldukheil

Abstract

In chapter 4, we espoused some likely budgetary gaps going forward in Saudi Arabia using reliable data and reasonable assumptions on revenue and expenditures. In this chapter, we turn to the question of how the kingdom can go about financing these gaps. It is assumed that the gaps will be financed either by drawing from the government’s Net Foreign Assets (NFA), managed by the Saudi Arabian Monetary Agency (SAMA), or by borrowing. We do not assume here that gap can be financed by printing currency. Further, it is assumed that the government’s domestic investment, mainly in equity in the private sector, has become an integral part of private sector corporate structure and GDP; as a result, the kingdom will not liquidate these investments to finance its deficit. If the government does decide to do so, however, the value of these shares is negligible relative to forecasted gaps to be financed, not to mention the fact that withdrawing government financing is likely to bankrupt these institutions.

Suggested Citation

  • Abdulaziz M. Aldukheil, 2013. "Financing the Gaps," Palgrave Macmillan Books, in: Saudi Government Revenues and Expenditures, chapter 0, pages 111-141, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-1-137-34292-8_6
    DOI: 10.1057/9781137342928_6
    as

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