Does Saudi Arabia has debt?

National debt of Saudi Arabia 2027

The statistic shows the national debt of Saudi Arabia from 2017 to 2021, with
projections up until 2027.
In 2021, the national debt of Saudi Arabia amounted to around 250.24 billion U.S.
dollars.

What is the biggest problem in Saudi Arabia?

The challenges facing Riyadh, include the dwindling of Saudi Arabia's income
resulting from the drop in oil prices,
Islamic terrorism in its own territory, the military intervention in Yemen, and
hostile relations with Iran.

Does Saudi Arabia own US debt?

Among the largest holders of US debt during the month of February, Saudi Arabia has
secured 18th place.
The Kingdom's holdings of US treasuries were distributed among long-term bonds with
an accumulated worth
of $101.3 billion.This figure accounts for 87 percent of the total holdings

NDMC was established in late 2015. It aims to secure the sustainability of Saudi
Arabia’s access to various debt
markets worldwide to fund the country’s budget deficit with the best possible cost
structure.And it ensures infrastructure
projects get the appropriate funding.

Although striving for economic diversification via the Saudi 2030 Vision framework,
the kingdom still relies heavily
on oil and remains vulnerable to price volatility. The severe plunge of oil prices
during the pandemic posed many
challenges. And during 2020, the NDMC swiftly revised its debt plan and added SAR
100 billion ($26.7 billion)
in debt on the budgeted SAR 120 billion, reaching a total public debt issuance of
SAR 220 billion.

Diversifying the Investor Base

When NDMC began issuing debt, the focus was primarily on SAR borrowing and to a
lesser extent, US dollar-based
borrowing.These issuances saw regular over-subscriptions. NDMC then tapped the euro
market and accessed a broader
investor base via its €3 billion issuances in 2019 and €1.5 billion in 2021. The
latest was the largest ever
negative-yield euro issuance outside the eurozone, as it issued the three-year debt
at minus 0.057% yield.
That meant Saudi Arabia was being paid to borrow.

On 30 September 2021, FTSE Russell announced the inclusion of the local currency
Sukuk in the FTSE Emerging Markets
Government Bond Index (EMGBI), effective April 2022. Around a third of the current
outstanding debt will be included
in the index, greatly aiding investor access, market liquidity, and Saudi debt
attractiveness.

Addressing Interest Rate Risk

NDMC pays close attention to interest rate risk, particularly cost visibility. The
year-end 2021 numbers reveal that 82.
6% of the overall debt cost is based on fixed interest rates, while only 17.4% is
floating (i.e., variable).
On average, the floating-rate debt has a much lower maturity than the fixed-debt
exposure.

Over 50% of the debt was issued in a relatively low-interest-rate environment,

capturing favorable pricing levels.
We are currently seeing upward steepness in the interest rate implied forward curve
across all durations, which offers
NDMC a favorable debt valuation. For example, the duration of the overall portfolio
(again as of year-end 2021)
is 9.52 years. This means that the DV01 metric (the dollar value change for each
basis point change in the
interest rate yield curve)will be favorable if the interest rate curve turns
steeper. Intuitively,
the longer the duration of the debt portfolio, the more sensitive it is to changes
in the yield curve.

Also, the average duration at year-end 2020 stood at around 8.7 years. Extending
the average maturities
reduces the liquidity and refinancing risks, which are typical risk components for
public debts.

Another achievement in 2021 was tapping financing of US $3 billion from Korea Trade
Insurance Corporation (KSURE).
This also opens the door for similarly huge arrangements in the future. Before
that, Saudi Arabia secured an Euler
Hermes financing agreement in July 2020 (US $258 million).

To facilitate this financing ecosystem, Saudi Arabia has launched its own export
credit agency (ECA),
the Saudi Export-Import Bank (Saudi Exim). It also embraced a green financing
framework, implementing
best practices in a rapidly developing and increasingly regulated environment.