Saudi Arabia's oil and economy
The gross domestic product of Saudi Arabia is predicted to fall below previous values from 2015 on. This is likely due to falling crude oil prices in the region, which are almost half of what they were in 2014. As the country is home to the second largest share of oil reserves in the world and among the countries with the largest percentage of proved natural gas reserves the economy has become largely dependent on income from these resources and changing market prices directly affect the economy.
Due to falling prices, the ratio of government expenditure in Saudi Arabia in relation to GDP has increased by almost 8 percent compared to previous years, leaving the country with a budget deficit and increasing national debt, as Saudi Arabia tries to make up for the losses to its largely oil-based economy. If oil and gas prices remain low, Saudi Arabia will need to reduce its capital spending. However, it is unlikely that gas and oil prices will remain low for a considerable amount of time and in the meantime, other counties are enjoying slumps in gasoline prices at the pump.