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Opec’s largest producer Saudi Arabia continues to run down its net foreign assets as it maintains its elevated level of expenditure at a time of reduced oil revenue and depressed oil prices.
Net foreign assets fell to $680bn at end-May, down $6bn on April and $66bn (9%) from their August 2014 peak of $746bn.
With the kingdom’s (and Opec’s) policy of maximizing market share rather than cutting output to support prices, Saudi Arabia’s oil revenue is likely to remain at relatively-subdued levels for some time to come. And while the Saudi government for now at least, maintains its current level of expansionary budget expenditure under the stated counter cyclical fiscal policy, then the drawing down of reserves is likely to continue.
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