The Saudi economy grew by 8.8 percent in 1999 as oil prices soared, according to a central bank report published Wednesday, which foresaw even higher growth this year. Government revenue rose by 4.2 percent to 147.5 billion riyals ($39.3 billion) while expenditure declined by 3.3 percent to 183.8 billion riyals ($49 billion), the Saudi Monetary Agency (SAMA) said.
The kingdom recorded a balance of payments surplus of 1.5 billion riyals ($400 million) in 1999 compared to a deficit of 49.2 billion riyals ($13.1 billion) the previous year. "World oil prices have improved significantly since the second quarter of 1999," noted SAMA governor Hamad al-Sayari, quoted by the Saudi Press Agency.
The oil sector roared ahead with 23.7 percent growth while the non-oil sector managed 2.5 percent, the report said. "It is expected that the improvement in the budget position will continue during 2000 due to strong oil prices and the reforms adopted by the government to increase domestic revenue and rationalize expenditure," SAMA said.
With oil fetching more than 30 dollars a barrel — triple the price 18 months ago — economists in the kingdom predict a 60 percent rise in oil revenue this year and a budget surplus of around 35 billion riyals ($9.3 billion).
The budget deficit fell to 36.3 billion riyals ($9.7 billion) in 1999, or seven percent of GDP, from 48.4 billion riyals ($12.9 billion) the previous year, the agency said. — (AFP, Riyadh)
© Agence France Presse 2000