Rise will be a result of a sharp increase in oil revenue
Saudi Arabia’s budget surplus could rocket by nearly 28 times in 2012 as revenue will likely be far higher than the level projected by the world’s largest oil exporter, according to a key Saudi investment firm.
The Gulf Kingdom, the largest Arab economy, projected a budget surplus of SR12 billion when it announced its highest ever expenditure of SR690 billion for 2012 and forecast revenue at SR702 billion.
In a study sent to Emirates 24/7, the Riyadh-based Jadwa Investments said it expected the actual surplus to swell to nearly SR306 billion, the second highest since the record balance of SR581 billion in 2008.
It projected revenue would surge to SR1,094 billion and expected the government to again overshoot budgeted spending to SR757 billion.
Jadwa expected the price of Saudi crude to average around $100 in 2012, more than 50 per cent above the $60 price assumed by Riyadh.
The country’s oil output is also expected to grow to an average 9.6 million barrels per day this year from 9.3 bpd in 2011, it said.
Strong oil prices and higher production will also boost Saudi Arabia’s foreign assets to an all time high of around $758 billion at the end of 2012 from nearly $634 billion at the end of 2011, the report said.
Jadwa maintained its previous forecasts for Saudi Arabia’s real GDP growth at 5.3 per cent this year but expected growth to fall back to 3.5 per cent in 2013.
A breakdown showed the government sector would grow by 6.7 pent while growth is forecast at around 5.1 per cent in the oil sector and 4.9 per cent in the non-hydrocarbon private sector.
GDP in current prices will likely rise by around 3.8 per cent to SR2.24 trillion in 2012 from SR2.16 trillion in 2011. Growth this year will be sharply below that in 2011, when nominal GDP shot up by 28 per cent.