Saudi Arabia, the world’s top producer of crude, will see the budget surplus it has enjoyed in the past turn into a deficit of 4.7 percent of gross domestic product this year, according to the median estimate of eight economists surveyed by Bloomberg. That would be the first shortfall since 2009, according to International Monetary Fund data.
The Middle Eastern nation, which derives about 90 percent of its budget revenue from oil, recorded a surplus of 8.7 percent of GDP in 2013. (Data for 2014 surpluses or deficits aren’t yet available in many countries, so we’re using 2013 for comparisons.)
Oil exporters Kuwait, Qatar and the United Arab Emirates will also see their surpluses take hits this year, according to the Bloomberg surveys, which were conducted in December and January.
Russia, which has seen seen the effects of sanctions by the U.S. and European Union compounded by the drop in oil prices, is forecast to see a budget shortfall of 2.3 percent of GDP, wider than the 0.85 percent in 2013.
For countries that are net importers of oil, though, the budget outlook looks brighter. Japan will be able to shave a budget deficit amounting to 9 percent in 2013 to 6.8 percent this year, Bloomberg’s survey found, as its central bank embarks on record stimulus. The U.K., which only became a net importer of fossil fuels in 2013, according to the U.S. Energy Information Administration, will narrow its budget deficit to 4.2 percent of GDP from 5.9 percent two years ago, analysts figure.
Rodster on Fri, 30th Jan 2015 7:22 am
As Gail Tverberg points out constantly. The high price of oil has funded government liabilities over the past several decades. Countries that are heavily dependent on oil exports LIKE, Russia are feeling the squeeze right now. They sort of lucked out that China came to their rescue and has been buying their energy reserves.
Ah, the joys of BAU.
Davy on Fri, 30th Jan 2015 7:35 am
Part 2 of this article is the end of global QE’s effectiveness. The countries not on this list have government budgets that will not be covered in a deflationary environment. Add to that interest rates rising either the ones the central banks control or the rates that the markets will force on the system. So much is written now about oil producers in hoc. Basically the whole global system is in disequilibrium with a financial house of cards ready to fall.
Confidence is liquidity and liquidity is trade. Without the global system of vast distributed global production and global networks to facilitate trade all those delocalized locals that depend on the global are going to be hungry. I know of no location that is safe regionally and nationally because the global is teetering. There may be some lucky locals that have some safety but it is still a product of probability and statistics. Nowhere is safe and everywhere is in the same sinking ship.
So feel great if your country is not on this list but don’t dig any further if you want to feel good because there is nothing but stink. I was reading on ZH about Venezuela and how the country is close to collapse. Then I was thinking that is the type of place that may be most prepared for a collapse for actively practicing collapse. I actually believe Cuba is the best example of a country that may survive the coming collapse. That is if they don’t allow too much capitalistic infection in from the normalizing ties with the US.
paulo1 on Fri, 30th Jan 2015 7:45 am
I didn’t see Saudi America on the list or in the above article.
Seriously. I just spent a few days in the States visiting relatives and my family actually believes US is a net oil exporter and that these low prices confirms there never was a Peak Oil issue. I tried to explain the ZIRP fueling insane debt level financing for shale producers and subsets, and they simply looked at me with disbelief. I trotted out some stats and GNE figures and they simply looked blankly at me.
I am one of those people who believe the family dinner is more important than any thing I might say or need to say at the table so I simply shut up and left them to it. The next day my brother-in-law commenced his 2 hour commute to the university where he teaches. And we left for home.
My family is absolutely unable to question or doubt what we call BAU in this venue. It very much reminds me of trying to talk to someone who is consumed with their religious convictions. To be honest, upon reflection I feel terrible. This week I peeked over the wall and saw how part of my family lives. On the surface it is wonderful and is the picture of success. I feel like I am watching them play on the freeway and my words will simply add to their danger and fear. Their children have more debt than anyone I know but they have careers and nice homes. Anything I say will either make them defensive, unhappy, angry, or scared. Why would I say anything? I can’t change one damn thing about it.
I could go on and on with the story and supply details, but the jist of it is quite simple. I saw an immense gulf between our quite simple way of life and my family’s frantic and debt fueled way of life. I guess I will drag out the experience and think about it every so often. It doesn’t make sense to me, now.
Davy on Fri, 30th Jan 2015 8:03 am
Same story here Paulo. My family respects what I tell them but they don’t want to live in pessimism. I do have my brother behind me with the doomstead. He could do so much more but at least it is something. I rarely say anything to them anymore. I send the occasional really good article on our global predicament by email. I generally copy and paste it to a PDF for attachment so they are not prejudiced to the site it comes from. If we are ever around the table and I hear something just plain untrue of grossly distorted I chime in a response. I drop it after that with a “frig it” attitude. The majority of people do not want to face what is coming. They chose to selectively hear what they want. This situation is increasingly fragile and I suspect there will be a huge lurch at some point by the masses for answers to the lies and distortions.
bobinget on Fri, 30th Jan 2015 8:21 am
Hail the New King!
King Salman bin Abdulaziz has ordered a massive $29.3 billion (110 billion Saudi Riyals) spending in a series of decrees issued on Thursday, that include lavish payments of two months bonus salary to all Saudi state employees and a series of subsidies.
Former government employees will receive two months bonus pension, while students, people with special needs and people receiving welfare payments will also benefit from a bonus payment equivalent to two months of their annual income.
The King posted a statement later on Twitter in which he addressed his people saying: “You deserve more and whatever I do will never meet your right. I ask Allah to help me and you for the service of religion and the nations. Don’t forget me in your prayers.”
Included in the handouts was $5.3 billion (20 billion riyals) pledged in subsidies for electricity, water, and housing.
King Salman succeeded his brother, the late King Abdullah, who died after a short illness last week.
And in a commitment to the arts, King Salman pledged $267,000 for each art club in the kingdom.
http://english.alarabiya.net/en/business/economy/2015/01/30/Saudi-King-orders-massive-29-3-billion-spending.html
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bobinget on Fri, 30th Jan 2015 8:30 am
Getting nervous?
Saudis playing the religion card.
Moving away from secular and towards spiritual isn’t working, but that never stops those who believe in Devine Rights (of kings).
rockman on Fri, 30th Jan 2015 10:08 am
So the king is feeling generous in the face of lower revenue and increased deficits. With over $700 billion in reserve assets he can afford it. If I recall correctly he’s 79 years old. He can continue to piss away the security of future Saudi generations because he won’t be around to answer to them. Just like most US politicians don’t have a problem running up the national debt: for both govts it keeps the current citizens complacent. And future citizens? Screw em…they aren’t around to vote today.
ghung on Fri, 30th Jan 2015 10:17 am
Rock: ” He can continue to piss away the security of future Saudi generations because he won’t be around to answer to them..”
Maybe they just know those future citizens are screwed anyway; “his son will ride a camel” and all that. Smoke’em if you got’em, eh? These House of Saud guys all have the best classical educations oil money could buy. I’m sure they have a pretty good handle on what the future holds. “Not on my watch” is about the best they can hope for. I figure it’s pretty much the same in the US.
ghung on Fri, 30th Jan 2015 10:39 am
Paulo: “I trotted out some stats and GNE figures and they simply looked blankly at me.”
Yeah, Paulo, our society has built some very powerful filters into its members. Cognitive dissonance avoidance, confirmation bias, a strong sense of exceptionalism; all come in really handy when someone comes along to challenge everything they’ve invested their lives in believing.
For most, I expect that they’ll hang on fiercely to their delusions until reality comes along and smacks them with the ball bat of change. Even then, many won’t survive the rude awakening; most won’t handle it well; not at all. It’s a collective dream-state only a relative few can see.
Perhaps it’s better to just take another bong hit and watch it on CNN; send them a fruit cake for Christmas.
Makati1 on Fri, 30th Jan 2015 6:52 pm
Paulo, my family in the States are the same as your’s. I used to send articles by email to them when I saw a good one that explained current events. I doubt they were read as I never got replies or comments. I even had on niece ask me to stop sending them to her as they were ‘bullshit’ and/or ‘upsetting’. (BTW: She is 47 and has a grown family and is also married to a 1%er.) Guess that says it all. Lack of mirrors will be the cause of America’s demise.
I gave up on the deniers, and work with the ones trying to prepare. One family out of 14. Less than 1% of American’s are even trying. Chaos is coming to America and soon.
paulo1 on Fri, 30th Jan 2015 7:35 pm
Mak and Ghung,
Good advice from you guys. I vented a bit to my wife today and seem to feel better for it. She echoed your thoughts. She is a really good listener and now I will put it out of my mind until they ask, “what happened”?.
Speculawyer on Fri, 30th Jan 2015 8:18 pm
I suspect that most of the rich Saudis have money stashed around the world and when the time comes and TSHTF, they’ll just leave the country and live on that stashed money.
Keep the party going while it lasts, but be ready to bug out if there is a revolution, the oil production starts to dry up badly, a neighbor invades, etc.
Fred's Horseradish on Sat, 31st Jan 2015 1:04 pm
Been keeping up with you people and peak oil. My experience the same. The family does not want to hear about it.
I was put away in a mental institution
for 10 days because of all the non-sense I was spewing out. Have 206 acres in the mts. of N Calif. Feel the only better place would be where it get -40 F in the winter.
Told my daughter to get her family to a survival able place and she said they are happy where they are
My expertise is in history, religion, psy, not science.