Saudi Arabia will record a high fiscal surplus in 2013 for the third year running as the world’s dominant oil exporter continued to pump crude at high levels and oil prices remained strong, according to a Saudi investment firm.
The Riyadh-based Jadwa Investments said it had revised up forecasts for the Gulf Kingdom’s budget surplus for this year although domestic oil production is expected to be slightly lower.
It forecast the real surplus at around SR201 billion compared with previous projections of SR177 billion and nearly 22 times the budgeted surplus of SR9 billion.
“We have revised some of our 2013 forecasts to take account of a recent flow of data. While year-to-date average oil production has so far been in line with our forecasts, oil prices recorded a stronger than expected positive trend in the last two months,” Jadwa said in a study.
“As a result, we have adjusted our forecasts for Brent crude upward to $108 per barrel (pb) this year, while keeping annual oil production average at 9.6mbpd, 1.7 percent lower than last year. Consequently, we have raised our projections for both the budget and current account surpluses.”
The report showed real revenue would reach around SRSR1,069 billion compared with budgeted revenue of SR829 billion. It projected real expenditure at around SR895 billion compared with budgeted spending of SR820 billion.
Revenue this year will be below the real income of around SR1,247 billion in 2012, when crude prices shot up to their highest average of $112 a barrel and Saudi Arabia, the largest Arab economy, pumped at its highest annual average of 9.8 million bpd.
Saudi Arabia basked in its highest budget surplus of SR581 billion in 2008 after a surge in oil prices nearly doubled its budgeted revenue to SR1,101 billion. The surplus plunged into a deficit of SR87 billion in 2009 after a sharp fall in oil prices before rebounding into a surplus of SR88 billion in 2010 and SR291 billion in 2011.
Jadaw expected the surge in income to reduce Saudi Arabia public debt to SR90 billion at the end of 2013 from SR99 at the end of 2012 and to push up its foreign assets to $700.9 billion to cross that mark for the first time in the country’s history.
ifpinfo
4 0ctober
