Business Economy 18 Mar 2020 Oil crash piles pres ...

Oil crash piles pressure on oil-dependent Saudi Arabia

AFP
Published Mar 18, 2020, 8:58 am IST
Updated Mar 18, 2020, 8:59 am IST
The top crude exporter also faces plummeting oil prices, which slipped below $30 a barrel this week for the first time in four years
Representative Image (AFP)
 Representative Image (AFP)

RIYADH: From empty hotels to shuttered beauty salons, oil-dependent Saudi Arabia is bracing for a coronavirus-led economic slump on top of possible austerity measures as crude prices go into free fall.

Huge losses are expected after the Arab world's biggest economy shut down cinemas, malls and restaurants, halted flights, suspended the year-round umrah pilgrimage and locked down eastern Qatif region home to around 500,000 in a bid to contain the deadly virus.

 

The top crude exporter also faces plummeting oil prices, which slipped below $30 a barrel this week for the first time in four years, on the back of sagging demand and a price war with Russia.

The shock of this liquidity sapping cocktail of events has necessitated austerity measures which are likely to imperil grandiose diversification projects.

Adding to the chain of events are the recent arrests of King Salman's brother and nephew, which triggered speculation of political instability amid the government's public silence on the royal purge.

"It's crisis time," said a Saudi government employee, explaining why he had begun converting part of his salary into US dollars and gold coins.

"Everything is unpredictable and we should be ready for the worst."

The central bank has shrugged off fears that plunging oil prices were straining the kingdom's currency, pegged for decades to the US dollar.

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Location: Saudi Arabia, Riyadh, Riyadh




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