The new IMF projections on Saudi Arabia’s deficit are slightly disconcerting, with the agency predicting that the budget shortfall will reach 7% of GDP in 2019 – nearly double of what Riyadh is expecting.

The estimate is based on certain assumptions regarding the oil market, specifically that prices will average around $65.5 a barrel over the course of the year and Saudi output will hover around 10.2 million barrels a day.

Saudi Arabia is currently on pace to export around 10 million bpd in May, which is higher than April levels but still under the 10.3 million bpd quota agreed to at the latest OPEC+ meeting.

Fiscal shocks threaten to undermine the welfare-for-power social contract that holds Saudi politics together, which, given the Kingdom’s importance as an exporter, could produce intense volatility in global energy markets.