To the outside world,
Saudi Arabia has long been seen as a country of largesse, a kingdom gifted with vast oil wealth, where thousands of princes live in opulence, a place that the world’s biggest banks and struggling nations turn to in their hours of financial need.
But beneath that veneer lies another reality: one of a country getting deeper and deeper into debt. Since 2015, when a collapse in oil prices forced it to borrow money to balance the books, Saudi has borrowed more than US$200bn – either directly from banks or on the global bond markets.
Simply put, the kingdom is living beyond its means. Despite big cuts to government handouts, oil sales are no longer enough to balance the budget. It’s a problem that’s set to worsen in coming years as Saudi embarks on a massive – and hugely expensive – overhaul of its oil-dependent economy.