With strict discipline from OPEC+ members oil prices could surprise on the upside, as the capital expenditures in the oil sector have dropped materially which could lower long-term supply, he concluded.

Al-Sudairi said he believed even while much of the 2021/22 deficits will be funded by debt, the 2020 Debt/GDP ratio — at 34.4 percent — remains reasonable compared with debt levels among other advanced economies and emerging and middle-income countries (63.7 percent), especially after the surge witnessed following coronavirus-related stimulus efforts. The government expects debt to increase to SR1,026 billion by 2023 from SR854 billion in 2020.

Government expenditure, though forecast to be down by 7 percent year on year in 2021, is relatively less important than it has been in the past, as regulatory changes — such as increased women’s employment, e-governance, the opening up of tourism, mortgage subsidies, PIF mega projects — can have cascading benefits that do not necessarily require high direct spending by the government, he added.

• Mazen Al-Sudairi is head of research at Riyadh-based financial services company Al-Rajhi Capital.