6.01 PM Thursday, 28 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:57 06:11 12:27 15:53 18:37 19:51
28 March 2024

Saudi oil income to dip $48bn

Published
By Staff

A surge in crude prices allied with higher production boosted Saudi Arabia’s oil export earnings to their highest level in 2012 but an expected decline in prices and output will depress its income by nearly $48 billion in 2013, according to a local investment firm.

Despite the fall in the income of the world’s dominant crude exporter and largest Arab economy, its nominal GDP is projected to swell by about $36 billion and foreign assets by nearly $44 billion by the end of 2013, the Riyadh-based Jadwa Investment said.

Higher output and prices boosted the Gulf Kingdom’s oil export earnings to an all time high of around $337.4 billion (Dh1.26 trillion) in 2012 but the income is forecast to tumble to nearly $289.4 billion (Dh1.06 trillion) this year, Jadwa said in a study.

It based its projections on an expected fall in the country’s oil output to 9.6 million barrels per day in 2013 from a record annual high average of 9.8 million bpd in 2012 and a decline in the price of Saudi crude to an average $103 from $106.1.

But the study, sent to Emirates 24/7, expected Riyadh’s foreign assets to continue their rise through 2013 to peak at around $700.9 billion (Dh2.57 trillion) at the end of the year compared with $656.9 billion (Dh2.4 trillion) at the end of 2012.

The increase will be far below that in 2012, when the assets swelled by around $114 billion (Dh421 billion) after oil prices climbed to their highest average.

In 2011, SAMA’s assets leaped by about SR352 billion as a result of high oil prices and a sharp rise in the Kingdom’s crude output to an average 9.3 million bpd from around 8.2 million bpd, an increase of 1.1million bpd.

It was the biggest annual increase in the assets 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.

Jadwa also expected an increase of around $44 billion in Saudi Arabia’s nominal GDP to nearly $711 billion (Dh2.6 trillion) in 2013 from $669.5 billion (Dh2.45 trillion) in 2012, a growth of about 5.1 per cent. It forecast real GDP would grow by around four per cent in 2013 compared with about 5.1 per cent in 2012.

The report also expected a tiny budgeted surplus to rocket to nearly SR201 billion at the end of 2013 despite a projected surge in expenditure.

Buoyed by strong oil prices, Saudi Arabia announced a record high budget of SR820 billion for 2013 and analysts expect actual spending to end the year much higher as was the case in previous years. Revenues were put at SR829 billion, leaving a budgeted surplus of SRnine billion.