Saudi assets up SR49bn in March

Strong oil prices along with high production boosted Saudi Arabia’s foreign assets by 49SR12 billion in March although the world’s dominant crude exporter has projected record spending for this year, according to official data.

The assets, controlled by the Saudi Arabian Monetary Agency (SAMA), central bank, peaked at an all time high of around SR2,536.7 billion (Dh2,511 billion) at the end of March compared with nearly SR2,487.6 billion (Dh2,462 billion) at the end of February, SAMA said in its latest monthly bulletin.

The increase meant that the assets swelled by around SR51 billion in the first quarter of 2013 as they stood at nearly SR2,485 billion at the end of 2012.

Year-on-year, the assets were higher by a whopping SR382 billion as they stood at about SR2,154 billion at the end of March 2012. They were also nearly double their level six years ago, when they stood at SR1,196 billion.

A breakdown showed most of the increase was in deposits with banks abroad and investment in foreign securities. Deposits grew from SR480 billion at the end of February to SR514.6 billion at the end of March while investments increased from nearly SR1,773 billion to SR1,795.2 billion.

Analyst said the rise in the assets in March was a result of high oil prices which remained almost 50 per cent above Riyadh’s budgeted crude price of $70 a barrel. “This means that even if Saudi Arabia overshoots planned spending by 10-20 per cent, there will be a large surplus at the end of the year,” one expert said.

Forecasts by Saudi Arabia’s largest bank showed the actual fiscal surplus could swell by a staggering 30 times 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.

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