Low prices offer an opportunity to reshape the economy, Prince Mohammad says.
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Saudi Arabia's drive to reduce the economy's reliance on oil has hit a snag: its reliance on oil.The International Monetary Fund revised its forecast for Saudi growth this year to 0.1 percent from 0.4 percent. And while it now expects non-oil GDP to grow 1.7 percent after stalling last year, the new figures compare with an earlier estimate of about 2 percent.In the past two years, authorities cut spending, curtailed costly energy subsidies and announced plans to sell government stakes in multiple companies, including oil giant Saudi Aramco.The index is up 0.6 percent this year, compared with a 23 percent gain for the MSCI Emerging Markets Index.Low crude prices are hobbling the crown prince's economic plans at a time when foreign policy challenges threaten to cost him political capital. To be sure, the IMF commended the Saudi reform efforts and said it expects the budget gap to fall to 9.3 percent of GDP this year from 17 percent in 2016 – and to just above 1 percent by 2022 . Economic output shrank in the first quarter by 0.5 percent.
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