IMF warns Saudi Arabia to become bankrupt by 2020

The world’s wealthiest kingdom may be bankrupt by the year 2020, says a new report from the International Monetary Fund (IMF).

Earlier this week, the IMF released its World Economic and Financial Regional Surveys, and it found that the Middle Eastern region is set to experience an all out financial collapse over the next five years due to falling oil prices. The epicenter of that crisis will be in Saudi Arabia.

One of the reasons for the kingdom’s bankruptcy is because its cash reserves are in free-fall. The government refuses to balance the budget since the thousands of Saudi royal family members purchase national support through welfare spending. But this is only affordable when the price of oil hits $103 to balance the books.

Millions of residents in Saudi Arabia maintain a high standard of living, but that’s because of government support. Most citizens do not have any job skills, and when they do have jobs it’s to work for the government. In fact, the population of 30 million only has 5.5 million people working, and three million of those are employed in the public sector.

Indeed, many of its neighbors are employing hiring freezes, energy reforms and lower investments. However, Saudi Arabia has confirmed multiple times that it will not take part in any austerity measures, which means zero tax increases and spending cuts.