Saudi assets gain SR96 bn in Q1

Saudi Arabia’s foreign assets swelled by SR96 billion (Dh94 billion) in the first quarter of 2011 due to high oil prices and output and experts said the surge showed the Gulf Kingdom is on track to achieve another large fiscal surplus.

The assets of the Saudi Arabia Monetary Agency (SAMA), the Gulf Kingdom’s central bank, soared to an all time high of SR2,154 billion (Dh2,132) billion at the end of March compared with SR2,057 billion (Dh2,0387 billion) at the end of 2011, SAMA said in its latest monthly bulletin.

Most of the increase was in deposits with banks abroad as they surged by around SR81 billion to SR495.2 billion from SR414 billion (Dh430 billion). Investment in foreign securities swelled by nearly SR19 billion to SR1,446 billion (Dh1,422 billion) from SR1,427 billion (Dh1,413 billion).

Following a sharp fall in late 1990s, SAMA’s assets began their rapid rise in the following years because of high oil prices and a surge in the country’s crude output. The year 2009 was an exception as they dipped by nearly SR130 billion due to a decline in oil prices and Saudi production.

In 2011, the assets leaped by about SR352 billion as a result of high oil prices and a sharp rise in the Kingdom’s crude output.

It was the biggest annual increase in the assets controlled by the Saudi Arabian Monetary Agency (SAMA) since 2008, when they rocketed by a whopping SR513 billion mainly because of a 50 per cent rise in crude prices that allowed the country to record its highest fiscal surplus of SR580 billion.

The increase last year was also more than double the assets growth of around SR135 billion through 2010, when they ended the year at SR1,705 billion compared with SR1,570 billion at the end of 2009.

A surge in oil prices to a record high average of $110 a barrel allied with a one million bpd increase in Saudi Arabia’s crude production to widen its fiscal surplus to nearly SR307 billion in 2011 from SR87 billion in 2010.

The current account of the largest Arab economy and the world’s oil powerhouse also shot up to $156 billion from $69 billion.

“Saudi Arabia assumed a fiscal surplus of SR12 billion in 2012 but the increase in SAMA’s assets shows the country is on track to achieve another massive surplus,” a Riyadh-based banker said.

Buoyed by strong oil prices, Saudi Arabia announced a record high budget of SR690 billion for 2012 and analysts expect actual spending to end the year much higher as was the case in previous years.

But according to the Riyadh-based Jadwa Investments, a projected tiny fiscal surplus of SR703 billion could balloon to SR392 billion at the end of the year due to an expected surge in revenue to SR1,149 billion through the year compared with a forecast SR703 billion.

The surge in the fiscal balance allowed Saudi Arabia, which controls over a fifth of the world’s recoverable oil deposits, to slash its public debt to its lowest level of SR136 billion since early 1990 from SR167 billion at the end of 2010 and as high as SR475 billion at the end of 2005. Jadwa expected the debt to dip further to nearly SR115 billion at the end of 2012.

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