Saudi Arabia Adopts Balanced Budget for First Time in 15 Years due to Oil Bonanza

Published December 19th, 2000 - 03:00 GMT

Saudi Arabia adopted a balanced budget for 2001 for the first time in more than 15 years and announced economic growth of 15.5 percent for 2000 thanks to high oil prices, the official news agency SPA reported Tuesday.

It did not specify on what oil price the budget was calculated.

King Fahd outlined the main points of the fiscal 2001 budget at a cabinet meeting late Monday, saying revenues and expenditures would be equal at 57.33 billion dollars, the agency said.

Gross domestic product in Saudi Arabia, the world's leading oil exporter and producer, reached 164.8 billion dollars in 2000, up 15.5 percent from 142.6 billion dollars the previous year.

"This growth is due to the spectacular rise in crude prices and increased oil production," the finance ministry announced in a statement. "Thanks to the price rises, the Saudi oil sector should attain growth of 39.4 percent in 2000."

Oil prices have tripled over the past 18 months. A barrel of crude on the world market rose 40 percent from 25 dollars at the start of 2000 to 35 dollars by October, but has since dipped again.

The finance ministry also forecast a surplus of 14.8 billion dollars in the balance of payments for the current fiscal year due to crude prices and increased exports in both oil and non-oil exports.

The government has set aside 10.1 billion dollars in 2001 to create more than 27,000 new jobs in the education, communications, public services and health sectors, it said.

A sum of 14.2 billion dollars is to be spent on the education and vocational training sectors next year, while the 2001 budget also calls for the construction of 800 new schools.

The health and social development sector is allocated 5.8 billion dollars, with 34 hospitals or medical centres to be built, while 2.98 billion dollars are set aside for the industrial and agricultural sectors.

Earlier this month, King Fahd said development projects and public services would be given priority in the 2001 budget.

Riyadh had forecast a deficit of 7.46 billion dollars in the 2000 budget, but the government calculated its budget figures around a conservative oil price of around 19 dollars a barrel, well below current prices.

In 1999, when the Saudi economy grew by 8.8 percent, the budget deficit hit 9.06 billion dollars -- RIYADH (AFP)