How rich is Saudi Arabia? | The Business Standard
Skip to main content
  • Epaper
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Saturday
May 24, 2025

Sign In
Subscribe
  • Epaper
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
SATURDAY, MAY 24, 2025
How rich is Saudi Arabia?

Analysis

Reuters
23 February, 2021, 05:30 pm
Last modified: 23 February, 2021, 05:33 pm

Related News

  • Saudi Arabia donates 667 tonnes of dates to support rohingya refugee children
  • Syrian leader Sharaa's path from global jihad to meeting Trump
  • Trump lavishes praise on Saudi crown prince, signaling renewed alliance
  • Trump meets Syrian president, urges him to establish ties with Israel
  • New initiative aims to support women in Saudi creative sector

How rich is Saudi Arabia?

Gulf countries don't typically publish information about their overall debts and assets but the PIF's riskier investment profile and infusion of state funding have made its opacity an issue for some investors

Reuters
23 February, 2021, 05:30 pm
Last modified: 23 February, 2021, 05:33 pm
How rich is Saudi Arabia?

The kingdom is working on creating a consolidated balance sheet of its assets and liabilities which will include items currently kept off the oil-rich economy's books, including the investments and debts of its powerful sovereign wealth fund.

"The main purpose of this programme is to have a financial equivalent of an MRI of the government balance sheet," a Finance Ministry spokesman told Reuters, adding that it would include assets and liabilities that are currently "off-balance sheet".

Saudi Arabia's Crown Prince and de facto ruler Mohammed bin Salman has put Public Investment Fund (PIF), Saudi Arabia's main sovereign wealth fund, at the centre of reforms aimed at diversifying the economy of the world's top oil exporter away from fossil fuel.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Under the prince's chairmanship, PIF has transformed from a sleepy sovereign wealth fund into a global investment vehicle making multi-billion dollar bets on hi-tech companies such as Uber as well as other equity investments and pledging tens of billions of dollars to funds run by Japan's Softbank .

Its financial statements are not published and it does not feature in the kingdom's budget, which is publicly available.

Gulf countries don't typically publish information about their overall debts and assets but the PIF's riskier investment profile and infusion of state funding have made its opacity an issue for some investors.

"Transfers of wealth from liquid pools of assets like central bank reserves into PIF's less liquid (and less transparent) investments increases the overall risk profile of the public sector balance sheet," said Kirjanis Krustins, a director in Fitch's sovereign team.

"Debt investors would tend to see the government and its key government related entities such as PIF as representing substantially the same risk. Thus the levering up of the broader Saudi complex could at some point impact the government's own borrowing costs," he said.

The government media office did not respond to a request for comment.

Aramco Billions

The government started working in the second half of last year on the so-called Sovereign Asset and Liability Management (SALM) framework and the spokesman said it was a 'long-term project' with no decision yet made on when and how its results would be disclosed.

"If we use benchmarks we will see countries spent a couple of years to implement the consolidation phase," he said of the project.

The PIF's finances are formidable.

Its assets have swelled to $400 billion as of 2020 from $150 billion in 2015, with the fund bolstered by an expected $70 billion payday from Saudi Aramco, the state oil company, for PIF's stake in a petrochemical giant and a $40 billion transfer from the central bank's foreign reserves.

It was also the recipient of nearly $30 billion in proceeds from Aramco's initial public offering in 2019.

The fund has raised $21 billion in loans between 2018 and 2019, and is finalising a new facility expected to be over $10 billion in size, sources have said.

The 'Normal' Way

Despite Saudi's oil wealth, creating enough jobs for the kingdom's young population is one of the biggest challenges facing Prince Mohammed, known in the West as MbS.

The government has been pushing through economic policies since 2016 aiming to create millions of jobs and reduce unemployment to 7% by 2030. But fiscal austerity to contain a yawning deficit has slowed investment, and the coronavirus crisis last year pushed unemployment up to a record 15.4%.

To get the deficit down from an eye-watering 12% of GDP last year to a shortfall of 4.9% by the end of this year, Riyadh has slashed capital spending.

It is relying instead on the PIF to fund some of the major infrastructure projects to help boost growth, including NEOM, a $500 billion high-tech business zone, and the recently announced "The Line", a 1 million inhabitants carbon-free city in NEOM, expected to cost between $100 billion and $200 billion.

PIF plans to inject at least 150 billion riyals ($40 billion) annually into the local economy until 2025, and to increase its assets to 4 trillion riyals ($1.07 trillion) by that date, Prince Mohammed has said.

"MBS understands that unless the economy grows at a rate above 6.5-7%, the youth unemployment rate will stagnate or grow – and that is a ticking time bomb," said Khaled Abdel Majeed, MENA fund manager at London-based SAM Capital Partners, an investment advisory firm, commenting about transfers of state funds to PIF.

"Doing things the 'normal' way through 'normal' channels will take more time than is available."

Global Economy

Saudi Arabia / Saudi / Saudi Arabia economy

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Jamaat-e-Islami Ameer Shafiqur Rahman and Jamaat Nayeb-e-Ameer Syed Abdullah Muhammad Taher meet Chief Adviser Muhammad Yunus on 24 May. Photo: CA Press Wing
    Jamaat meets CA for talks on elections, after BNP
  • The National Citizen Party (NCP) reached the State Guest House Jamuna at 8:28pm this evening (24 May). Photo: TBS
    Talks with CA: NCP reaches Jamuna after BNP, Jamaat
  • BNP senior leaders and CA at Jamuna on 24 May evening. Photo: CA Press Wing
    BNP meets CA for talks on election, ongoing political situation

MOST VIEWED

  • Five political parties hold meeting at the office of Inslami Andolan on 22 May 2025. Photo: Courtesy
    5 parties, including NCP and Jamaat, agree to support Yunus-led govt to hold polls after reforms
  • The Advisory Council of the interim government holds a meeting at the state guest house Jamuna in Dhaka on 10 May 2025. Photo: PID
    What CA Yunus discussed with Advisory Council about 'resignation'
  • Representational image/Wikipedia
    Bangladesh cancels $21 million deal with Indian shipbuilding firm: Reports
  • Chief Adviser Professor Muhammad Yunus presides over a meeting of ECNEC at the Planning Commission office on 24 May 2025. Photo: CA Press Wing
    CA Yunus is not resigning; we are not leaving: Planning adviser after closed-door meeting
  • Faiz Ahmad Tayeb. Photo: BSS
    CA Yunus will not resign: Special Assistant Taiyeb
  • Infographic: TBS
    Dhaka's traffic crisis needs $59b solution by 2045, estimates new strategy

Related News

  • Saudi Arabia donates 667 tonnes of dates to support rohingya refugee children
  • Syrian leader Sharaa's path from global jihad to meeting Trump
  • Trump lavishes praise on Saudi crown prince, signaling renewed alliance
  • Trump meets Syrian president, urges him to establish ties with Israel
  • New initiative aims to support women in Saudi creative sector

Features

The well has a circular opening, approximately ten feet wide. It is inside the house once known as Shakti Oushadhaloy. Photo: Saleh Shafique

The last well in Narinda: A water source older and purer than Wasa

1d | Panorama
The way you drape your shari often depends on your blouse; with different blouses, the style can be adapted accordingly.

Different ways to drape your shari

1d | Mode
Shantana posing with the students of Lalmonirhat Taekwondo Association (LTA), which she founded with the vision of empowering rural girls through martial arts. Photo: Courtesy

They told her not to dream. Shantana decided to become a fighter instead

3d | Panorama
Football presenter Gary Lineker walks outside his home, after resigning from the BBC after 25 years of presenting Match of the Day, in London, Britain. Photo: Reuters

Gary Lineker’s fallout once again exposes Western media’s selective moral compass on Palestine

3d | Features

More Videos from TBS

News of The Day, 24 MAY 2025

News of The Day, 24 MAY 2025

28m | TBS News of the day
State-owned banks: Too big to fail or just too broken to fix?

State-owned banks: Too big to fail or just too broken to fix?

1h | TBS Insight
Europe ready to defend interests after Trump's tariff threat

Europe ready to defend interests after Trump's tariff threat

1h | Others
Nuclear war between Pakistan and India would be foolish: Pakistan's ISPR

Nuclear war between Pakistan and India would be foolish: Pakistan's ISPR

2h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net