Saudi Arabia has decided to tap international bond markets for the first time, in a sign of the damage lower oil prices are inflicting on its public finances. Saudi officials say the kingdom could increase debt levels to as much as 50 per cent of gross domestic product within five years, up from a forecasted 6.7 percent this year and 17.3 percent in 2016. Work on finalising the bond programme is likely to start in January, according to a senior official. While banks have yet to receive any mandates, some lenders have already sent unsolicited proposals to guide the kingdom in approaching international markets. The authorities are in the meantime looking to set up a debt management office to help oversee the process of raising local and international bonds. “Debt levels are still very low — tapping international debt markets will be an important way to fund spending without absorbing liquidity from domestic banks,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.