This article is about how Israel and Saudi Arabia have experienced the largest falling curve in their sovereign-risk outcomes in the first half of 2024, according to Goldman Sachs, due to many economic and fiscal challenges, including war, large expenses on large-scale projects, and lower oil income, which may impact their ability to attract investment and maintain economic growth.
Goldman Sachs has reported that in the first half of 2024, Israel and Saudi Arabia have seen the largest decrease in their country risk scores. Israel’s war with Hamas has led to a significant drop in public finances, resulting in a sharp diminish in its sovereign-risk results. Meanwhile, Saudi Arabia’s financial pressures have risen due to spendthrift on large-scale projects as part of Crown Prince Mohammed Bin Salman’s Vision 2030 plan. This has reduced the scope for expenditure consolidation and led to budget deficits until at least 2026.
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The expenses of funding multi-billion dollar projects have added up for Saudi Arabia, which still depends mostly on energy to provide the bulk of government income.Fiscal deficits are forecast due to lower oil revenues, which have affected Saudi Arabia but also Gulf countries such as Oman and Bahrain.
Goldman Sachs estimates sovereign-risk outcomes based on many metrics, including economic, governance, fiscal, external, and monetary factors. The scores for both Israel and Saudi Arabia have declined, with Israel’s score dropping by -2.81 and Saudi Arabia’s by -1.21, compared to the second half of 2023.
The report mentions the challenges faced by these countries in managing their finances and approaching fiscal stability. The falling curve in sovereign risk scores may affect their ability to attract investment and maintain economic growth. The article provides valuable insights into the economic condition in the Middle East and the factors that affect the risk outcomes of countries in the region.
By Yahoo news
