Crisis trims Arab fiscal surplus by $248bn

The global financial distress slashed the combined fiscal surplus of the Arab countries by more than $248 billion in 2009 and depressed their crude export earnings by nearly $246 billion, official figures showed on Wednesday.

A plunge of more than $30 in crude prices and nearly three million barrels per day in the collective Arab oil production also pushed down their total exports by nearly 31.7 per cent to around $726 billion last year, showed the figures by the 10-nation Organization of Arab Petroleum Exporting Countries (OAPEC).

Despite a sharp fall in their current spending, the combined budget surplus in the 21 Arab nations plummeted from a record high of around $254.1 billion in 2008 to only about $5.6 billion in 2009, OAPEC said in a study, presented by its economic researcher Taher Zaitouni during a lecture in Damascus.

His figures, carried in the London-based Saudi Arabic language daily Al Hayat, showed the crisis also depressed the consolidated Arab trade surplus by a staggering 58 per cent last year despite a decline in imports by some members.

“The crisis jolted economic growth and markets, led to a sharp fall in trade and industrial output, and increased uncertainty in regional and global economies.”

From a record high of around $254.1 billion in 2008, the combined Arab fiscal surplus tumbled to only about $5.6 billion, a drop of $248 billion, he said.

The sharp fall occurred despite a plunge in the Arab current expenditure to around $160 billion from a peak of nearly $421 billion.

Total exports collapsed by 31.7 per cent from more than $one trillion to around $726 billion and the bulk of the decline was in exports to the United States, the European Union and Southeast Asia, Zaitouni said.

The decline depressed the Arab trade surplus by nearly 58 per cent to around $184.9 billion in 2009 from $441.3 billion in 2008, his figures showed.

As for oil exports, the sharp fall in prices and output slashed the total value of Arab crude sales by $246 billion to around $378 billion in 2009 from nearly $624 billion in 2008, their highest ever level.

Zaitouni gave no breakdown but Gulf oil heavyweights were the main victim of the shrinking crude prices given their large production and heavy reliance on crude sales. Saudi Arabia, the world’s oil basin, was hit worst as its crude revenue dipped to around $163 billion last year from $281 billion in 2008.

The Kingdom was also the main victim of the crisis’s impact on the region’s fiscal balance, with its record budget surplus of around SR581 billion turning into a deficit of SR87 billion for the first time since 2002.