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Fiscal Surplus in Arab Nations Dropped $248 Billion

Middle East : 28 November 2010

Earnings on crude slashed by $246 billion last year.

The recent worldwide economic crisis had a negative effect on the fiscal surplus of the Arab world, trimming over $248 billion last year and decreasing the earnings for crude exports by almost $246 billion, according to official data.

As the price of crude dropped over $30 and production plummeted by almost 3 million barrels per day the total exports for Arab nations decreased by almost 31.7 per cent hitting $726 billion in 2009.  This data was released by the OAPEC (Organization of Arab Petroleum Exporting Countries), a group of ten nations.

Even with severe cuts to spending, the collective budget surplus for the 21 Arab countries dropped from the 2008 high of about $254.1 billion to a mere $5.6 billion last year, according to an OAPEC study.  Taher Zaitouni, economic researcher for OAPEC, presented this information in Damascus at a lecture.

The data was also printed in Al Hayat, an Arabic daily media based in London, and showed how the global distress reduced the collective trade surplus of the Arab nations, trimming a whopping 58 per cent from that amount in 2009 even though certain members reduced their imports.

The fiscal crisis was certainly felt across many markets and suppressed growth, stated Zaitouni, which resulted in a decline in trade and lower industrial output.  This in turn brought heightened uncertainty into both the local and global economy.

After reaching $254.1 billion two years ago, the collective fiscal surplus for the Arab world dropped $248 billion to land at $5.6 billion in 2009.

This drop occurred despite current expenditures being slashed by about $160 billion, down from the high of almost $421 billion seen in the past.

Exports plunged by around 31.7 per cent, hitting $726 billion and down from $1 trillion, as exports to the US, the EU, and Southeast Asia fell drastically, said Zaitouni.

Trade surplus within Arab nations dropped by almost 58 per cent, from the high of $441.3 billion seen in 2008 to only $184.9 billion last year, according to the researcher’s figures.

The value of crude oil sales for the Arab countries fell due to decreasing prices and lower outputs, reaching $378 billion last year.  That represents a fall of $248 billion from the all time high of $624 billion recorded in 2008.

There was no breakdown given between the Arab nations, but the big players in Gulf oil were hit the hardest by slumping prices since they rely most heavily on producing and selling crude.  Saudi Arabia was the main victim, seeing their revenue from crude fall from the 2008 level of $281 billion to only $163 billion in 2009.

The Kingdom of Saudi Arabia was also hardest hit in the area of fiscal balance, as their record high surplus of approximately SR 581 billion shrank to a SR 87 billion deficit, the first deficit seen since 2002.

Andrew Reid, Staff Writer, Gulf Jobs Market News
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