The economic conditions in Saudi Arabia have not been harmed from the turbulence spreading rapidly across the Arab region, according to the Minister of Finance. The minister also noted that fresh social measures will be put in place across the Kingdom on the first of March.
The leading oil exporting nation has not seen any of the popular protests raging across the area and toppling long established leaders in Tunisia and Egypt. The turbulence is now threatening the regimes in Bahrain, Oman and Libya.
Minister Ibrahim Alassaf noted to local media that the protests have had no “adverse impact” on the Kingdom’s economy.
He had also recently spoke to the group attending a financial conference, saying that the financial and economic climate in Saudi remains steady even after unrest in the area has shadowed the investment outlook for Gulf markets.
There have been jittery conditions within Saudi Arabian stocks, some falling this week to lows not seen in nine months, and a weak condition seen in Saudi currency. The currency forwards are approaching levels of weakness not experienced in two years. The cost for debt insurance has also gone up around the Gulf region, which is still the global leader for oil exports.
King Abdullah returned home recently after being away three months for medical treatments and announced a wide range of benefits for Saudi nationals totaling about $37 billion.
Alassaf stated that the king’s new measures would be executed right away.
A portion of the funds issued by the king are marked for Saudis looking for housing financing, which is an urgent issue within the increasing Saudi population of 18 million. More than 10 percent of local residents are jobless.
The minister also noted that spending in the Kingdom would increase in 2011 due to the royal measures, but added that it was too soon to quote a specific figure of increase. Alassaf stated that budgeted revenue would also rise.
The Minister stated that the Kingdom will draw on national reserves to assist in the funding of these new social benefits.
The net amount of foreign assets owned by Saudi Arabia peaked at 1.67 trillion riyals (or $445 billion), a record total, this past January. That amount has risen almost 9 percent over the last year due to healthy oil prices.
Saudi Arabia is a G20 member state and has budgeted for 580 billion riyals in spending throughout 2011, based on a conservative level of revenue at 540 billion riyals. That makes for three consecutive record high budgets.
The recent turbulence rising up again Arab governments has resulted in higher oil prices as Brent crude hit $112 per barrel in trading and US crude reached $97 per barrel.
Analysts in Saudi expect that the King may shuffle the cabinet soon in an attempt to bring in fresh blood and move through reforms. Stability in Saudi Arabia is a concern across the globe as this important US ally controls over one fifth of the global oil reserves.Paul Holdsworth, Staff Writer, Gulf Jobs Market News