Saudi to record $93 billion budget surplus in 2013

Saudi to record $93 billion budget surplus in 2013
2.5 5

Published January 8th, 2013 - 08:41 GMT via SyndiGate.info

Rate Article:

 
PRINT Send Mail
comment (0)
Saudi Arabia budgeted total expenditure of SR 690 billion in 2012, up 19 percent over the budgeted figure for 2011
Saudi Arabia budgeted total expenditure of SR 690 billion in 2012, up 19 percent over the budgeted figure for 2011
More >
Bloomberg

The Kuwait-based Global Investment House (Global) has predicted that Saudi Arabia will record a budget surplus of SR 349 billion in 2013, based on its assumption of a base case oil price of $102 per barrel.

Saudi Arabia has recently announced its budget for 2013, with budgeted revenues of SR 829 billion and an expenditure of SR 820 billion, a surplus of SR 9 billion for the year, which is lower than the budgeted surplus of SR 12 billion for 2012, a study released by Global said.

According to preliminary estimates, Saudi Arabia recorded a budget surplus of SR 386 billion ($102.9 billion), or 14 percent of GDP in 2012; this was significantly higher than the budgeted estimate of SR 12 billion ($ 3.2 billion) for the period, the study said.

According to the report, the Kingdom has posted a budget surplus for the third consecutive year. KSA had budgeted to rake in revenues of SR 702 billion in 2012, 30 percent above the budgeted figure for 2011. However, actual revenues for 2012 totaled SR 1.24 trillion about 76.5 percent higher than the estimate.

The robust growth in revenues is ascribed to the increase in oil revenues due to the rally in the oil price (Arab light crude rose over $100 a barrel) and higher production. Consequently, Saudi Arabia generated SR 1.14 trillion in oil revenues in 2012 (contributed 92 percent to total revenues), a little less than double the government’s projection of SR 621 billion for the year.

Saudi Arabia budgeted total expenditure of SR 690 billion in 2012, up 19 percent over the budgeted figure for 2011. Higher revenues enabled KSA to hike wages further, undertake more real estate projects and increase allocation for the unemployment benefit program. Consequently, Saudi Arabia recorded a total expenditure of SR 853 billion for 2012, up 23.6 percent over the budgeted figure for 2012.

Saudi Arabia’s budget surplus increased to SR 386 billion in for 2012 from SR 306 billion (actual) in 2011. This is mainly ascribed to the 11.6 percent rise in revenues, partly offset by a 6.1 percent YoY increase in total expenditure. The Kingdom recorded strong growth in revenues due to higher prices and increased crude output.

The average Arab light crude price was $110.6 a barrel in 2012, up about 1.9 percent YoY. Also, oil production averaged 9.8 million barrels/day during January–November 2012, nearly 6.5 percent higher than 9.2 million barrels a day over the same period last year, according to Bloomberg. Saudi Arabia maintained higher oil output to offset the shortfall caused by the disruption of oil supplies from Iran after oil sanctions were imposed on the country, the report said.

Meanwhile, strong surplus enabled KSA to significantly expand its foreign assets to SR 144.6 billion in November 2012, up 8.5 percent from SR 133.3 billion in December 2011. The Kingdom’s foreign assets have increased at a CAGR of 13.6 percent during 2006-11. The robust foreign asset base would help the Kingdom cushion the impact in case of an oil price shock, the report added.

Advertisement

Copyright: Arab News © 2012 All rights reserved.

Post new comment

The content of this field is kept private and will not be shown publicly.