RIYADH: Saudi Arabia said on Tuesday it has completed the issuance of a new Islamic sukuk sale to help finance its budget deficit as the kingdom accelerates borrowing despite rising oil prices.

The finance ministry’s debt management office said it raised $1.3 billion from the sale of sukuk in three tranches maturing in five, seven and 10 years.

This was the second sukuk sale this year following a $4.8bn issue it completed last month.

Last week, the kingdom also raised $11bn in the sale of conventional bonds. In early March, it struck a deal to refinance a $10bn loan and added another $6bn to it.

The Opec kingpin exporter has posted huge budget deficits since oil prices crashed about four years ago and resorted to the debt market to finance the shortfall.

It posted budget deficits totalling $260bn since 2014 and is projecting a shortfall of $52bn for this year, according to official figures.

The government debt level, both domestic and international, rose from 1.6pc of gross domestic product in 2014 to 17.3 of GDP last year reaching $118bn.

During the same period, the government has drawn down some $245bn from its fiscal reserves.

Oil income made up more than 90pc of public revenues before oil began to slide.

Published in Dawn, April 25th, 2018