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What are the economic effects of oil subsidies in Saudi Arabia?
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The economic effects of oil subsidies in Saudi Arabia are varied and far-reaching. With oil accounting for roughly 70-80% of government revenue, subsidies have helped to keep prices artificially low, providing the population with an affordable source of energy and helping to stimulate economic growth. At the same time, this has resulted in a reduction in domestic investment, as well as declining global oil prices, which have led to increased fiscal deficits and slower growth in the country. Furthermore, subsidies have also resulted in misallocation of resources, inefficiencies in the economy, and environmental degradation.