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29 March 2024

Arab fiscal surplus to fall in 2012

Published
By Staff

Higher oil prices and production sharply boosted the combined fiscal and current account surplus in the Arab countries in 2011 but the balance is expected to edge down in 2012, according to official data.

All the increase in the budget surplus was in the UAE and other Gulf hydrocarbon producers as the other Arab League members suffered from deficits, mainly those which suffered from political turmoil.

The current account surplus also hit an all time high in 2011 mainly because of a surge in the six-nation Gulf Cooperation Council (GCC) but it is projected to slip in 2012, showed the figures by the Kuwaiti-based Inter-Arab Investment Guarantee Corporation (IAIGC).

From around 29.5 billion in 2010, the combined Arab fiscal surplus swelled to nearly 70.7 billion in 2011 but will likely fall back to $60.4 billion in 2012, IAIGC said in its 2011 investment climate report.

A breakdown showed the surplus in Saudi Arabia, the world’s top oil exporter and largest Arab economy, soared from $30.5 billion in 2010 to $52.7 billion in 2011 and is forecast to edge down to $46.6 billion in 2012.

Kuwait had the second largest Arab budget surplus at $30 billion, which swelled to $46.4 billion in 2010. IAIGC expected it at $41.7 billion in 2012.

The surplus in the UAE, the second largest Arab economy, stood at $20.8 billion in 2011 compared with a deficit of $3.3 billion in 2010. IAIGC projected the balance to drop slightly to around $18 billion in 2012.

In Qatar, the world’s largest LNG supplier, the surplus surged from $3.7 billion to $13.2 billion in 2011 and is forecast to shrink to nearly $6.9 billion in 2012. Oman’s surplus nearly tripled from $2.9 billion in 2010 to around $7.3 billion in 2011 and is projected to recede to $six billion in 2012.

The report showed Gulf nations also accounted for the bulk of the Arab current account surplus as most other members reeled under deficits through 2010 and 2011 because of higher imports and a slowdown in exports caused by the political unrest.

It put the total Arab current account surplus at around $159 billion in 2010 and a record high of $272 billion in 2011. The report expected the balance to retreat to nearly $225 billion in 2012 mainly due to a decline in the GCC.

Saudi Arabia again had the largest current account surplus of $66.8 billion in 2010, which swelled to around $115 billion in 2011. IAIGC projected the balance to shrink to nearly $82 billion this year.

Kuwait’s surplus also soared from $36.3 billion to $57.2 billion but is expected to slip to about $53.6 billion in 2012.

Qatar had the third largest 2010 surplus of $32.2 billion which grew to nearly $56.5 billion in 2011 and is expected to slip to $54.4 billion in 2012.

The UAE’s surplus shot up from $21.2 billion to $36.9 billion in 2011 and is forecast to edge slightly down to around $34.7 billion in 2012.

Algeria, Oman and Bahrain are the only other Arab states which recorded current account surpluses during that period, according to IAIGC, a key Arab League financial establishment.