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29 March 2024

Saudi assets up SR12bn in one month

Published
By Staff

Strong oil prices allied with high output to boost Saudi Arabia’s foreign assets by around SR12 billion in January although the world’s top oil exporter forecast record spending for this year, according to official data.

The assets, controlled by the Saudi Arabian Monetary Agency (WAMA), central bank, peaked at an all time high of around SR2,497 billion (Dh2,472 billion) at the end of January compared with SR2,485 billion (Dh2,360 billion) at the end of December, SAMA said in its latest monthly bulletin.

Year-on-year, the assets were higher by a whopping SR406 billion as they stood at about SR2,091 billion at the end of January 2012. They were also nearly double their level six years ago, when they stood at SR1,196 billion.

Analyst said the rise in January was a result of high oil prices which remained almost 50 per cent above Riyadh’s budgeted crude price of $70 a barrel.

“Despite expectation Saudi Arabia would again overshoot budgeted spending this year, the budget will record a large surplus because average oil prices are forecast to be far higher than the budgeted price,” a Riyadh-based analyst said.

Forecasts by Saudi Arabia’s largest bank showed the actual fiscal surplus could swell by a staggering 30 per cent at the end of 2013.

Saudi Arabia, the largest Arab economy, projected 2013 revenue at SR829 billion and expenditure at a record high of SR820 billion, with a surplus of SRnine billion. The government is believed to have assumed an oil price of $70 for the budget but prices could average as high as $110 this year.

“Based on our forecast of oil prices at $110 a barrel, we project a fiscal surplus of SR277 billion or 9.5 per cent of GDP,” National Commercial Bank (NCB) said.

“This will result in oil revenues of SR1,043.5 billion, representing a decrease of 8.5 per cent compared to actual oil revenues in 2012, which also takes into account a 3.7 per cent decline in export volume.”

Saudi Arabia had forecast a small deficit last year but at the end of the year, it turned into a massive surplus of SR387 billion, the Kingdom’s second highest fiscal surplus after the record 2008 balance of SR581 billion.