Saudi assets up SR46bn in May

Strong oil prices and higher output boosted Saudi Arabia’s foreign assets by nearly SR46 billion (Dh45 billion) in May after recording one of their biggest increases in 2011, according to official data.

The foreign assets of the Saudi Arabia Monetary Agency (SAMA), the Gulf Kingdom’s central bank, soared to an all time high of around SR2,239.9 billion (Dh2,216) billion at the end of May compared with SR2,193.4 billion (Dh2,171 billion) at the end of April, SAMA said in its latest monthly bulletin.

The rise boosted the overall increase in the assets to SR182 billion in the first five months of 2012, indicating the country is heading for another massive fiscal surplus through the year as a result of high oil prices and production.

Most of the increase in May was in SAMA’s deposits with banks abroad as they surged by around SR37 billion to SR533 billion from SR496billion.

Investment in foreign securities grew by nearly SReight billion to SR1,490 billion from SR1,482 billion in the same period.

After sharp falls in late 1990s, SAMA’s assets began their rapid rise in the following years because of high oil prices and a surge in the country’s crude output. The year 2009 was an exception as they dipped by nearly SR130 billion following a decline in oil prices and production coupled with high spending as part of the government’s post-crisis fiscal stimulus measures.

In 2011, the 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 barrels per day 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.

The increase last year was also more than double the assets growth of around SR135 billion through 2010, when they ended the year at SR1,705 billion compared with SR1,570 billion at the end of 2009.

A surge in oil prices to a record high average of more than $105 a barrel allied with higher crude supplies to widen Saudi Arabia’s fiscal surplus to nearly SR307 billion in 2011 from SR87 billion in 2010.

The current account of the largest Arab economy and the world’s oil powerhouse also shot up to $156 billion from $69 billion.

Buoyed by strong oil prices, Saudi Arabia announced a record high budget of SR690 billion for 2012 and analysts expect actual spending to end the year much higher as was the case in previous years.

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