"Saudi Arabia is running large budget deficits of 15 to 20 percent of GDP, and is drawing down on its currency reserves," American political science professor James D. Savage told Iran’s Tasnim news agency.
He added that the International Monetary Fund (IMF) estimates Riyadh will run out of cash in five years and then "will go deeply in debt."
Earlier this week, it was reported that Saudi Arabia is seeking to borrow up to $8 billion from international banks and also could issue foreign bonds in a bid to cope with the widening budget deficit.
The Ministry of Finance has asked foreign banks to submit proposals to the loan, which would be between $6 billion and $8 billion, sources told The Wall Street Journal.
The kingdom is also considering raising billions from international bonds after securing the loan.
Riyadh is also mulling listing part of its state-owned oil company Saudi Arabian Oil Co. (Aramco), sources told WSJ.
With a slump in global oil prices, the country has faced a huge budget deficit which is expected to reach $87 billion this year. Saudi Arabia’s foreign reserves dropped to $640 billion last year from $737 billion in 2014.
The government announced austerity measures for this year, including spending and subsidy cuts, and said it would consider privatizing state assets.