A sharp decline in oil prices will combine with high population growth and poor economic performance to depress Saudi Arabia's personal wealth this year after surging to its highest ever level in 2008, according to independent forecasts.
From a record SR69,993 (Dh68,647) in 2008, the Kingdom's GDP per capita income is projected to dive to around SR55,220 in 2009 before rebounding in 2010, the Riyadh-based Jadwa Investment company said.
Jadwa forecast the Kingdom's population would maintain its high growth of around 3.2 per cent to peak at around 25.8 million at the end of 2009 compared to nearly 25 million at the end of 2008.
The gross domestic product would tumble by around 18.3 per cent this year after leaping by 22.5 per cent in 2008, citing a sharp fall in crude prices and a drop of more than one million bpd in Saudi Arabia's oil production.
The surge in oil prices to an average $93 for Saudi crude reversed a steady erosion in the Kingdom's per capita income due to low oil prices in previous years. The income dipped to one of its lowest level of SR29,400 in 1995 after a steep fall in the GDP and a 3.4 per cent population growth.
Despite the surge in 2008, the world's oil superpower remained far behind smaller Gulf oil producers Qatar and the UAE, whose per capita income was more than triple the Saudi income during that year.
The figures showed the Kingdom's GDP, which accounts for nearly a fifth of the combined Arab economy, peaked at SR1.75 trillion in current prices last year compared to SR1.43trn in 2007.
Saudi Arabia, which controls nearly a quarter of the world's recoverable oil reserves, earned a record $280 billion (Dh1trn) from crude exports in 2008 but the revenues are expected to plummet to only around $149bn in 2009 because of weak oil prices, according to Jadwa.
The plunge is expected to sharply push down the country's current account surplus to only $12.3bn from a record $150bn in the same period. This will depress the surplus to only 3.2 per cent of the GDP in 2009 from a peak of 32.2 per cent in 2008.
The budget is also expected to record a far lower surplus of around SR103bn this year compared to a record surplus of SR590bn in 2008 although Riyadh has forecast a deficit this year as it based its budget on an oil price of as low as $40 a barrel.
Jadwa's figures showed the plunge in Saudi Arabia's income this year would obstruct its plan to slash the public debt as it is expected to remain unchanged at around SR237bn after a steady decline in previous years.
It also expected the Kingdom's foreign assets, which are controlled by the Saudi Arabian Monetary Agency (Sama), to swell to a record $514.5bn at the end of 2009 compared to $499.5bn at the end of 2008. But the increase would be much below the 39 and 31 per cent growth recorded during 2008 and 2007 respectively.