DUBAI (Jan 23): Saudi Arabia's new king is expected to focus economic policy on creating jobs and multi-billion dollar infrastructure projects to prevent tumbling oil prices from causing social tensions or undermining business confidence.
King Salman, who took the throne in the early hours of Friday after the death of his brother King Abdullah, inherits an economy that faces its biggest challenge since the global financial crisis in 2009.
The world's top oil exporter relies on hydrocarbons for 90 percent of its state revenues, but oil's slide is slashing that income. The government has projected a record $38.7 billion budget deficit for 2015 and if Brent crude stays around $50 a barrel, the shortfall will be much bigger.
The new king must juggle that fiscal picture with pressure to bring down the unemployment rate - which was 11.8 percent last year, according to official data - as he manages the political transition in the months ahead.
Emad Mostaque, strategist at Ecstrat, an emerging markets consultancy, said Salman would face pressure to ensure public support with state sector wage increases and other populist steps.
Falih said the imbalance in the oil market had nothing to do with Saudi Arabia, and a fair price is what would ultimately balance supply and demand, a sign Riyadh is sticking to its strategy of allowing the market to stabilise itself.
"Saudi Arabia has a policy, the policy is set by the government through the Ministry of Petroleum, and they have said that Saudi Arabia will not single handedly balance the market," he said.
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Looking current situation, crude oil price will dip further and further. It is better stay away from oil & gas counters. It is not the right time to accumulate the stock. Wait it drops below 35
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stonenut
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Posted by stonenut > 2015-01-23 09:31 | Report Abuse
Gogogo....no matter oil up or down... Najib say perisai will up!