Jan 11 2012 |
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Saudi poised for another peak fiscal year
Budget surplus to end year much higher as oil income soars
Figures by a Saudi investment firm showed the economy of the world's oil powerhouse could slip in current prices this year but real GDP will still record positive growth of around 3.1 per cent despite an expected fall in oil output.
The largest Arab economy has projected a fiscal surplus of only about SR12 billion for 2012 but the actual balance could balloon to SR91 billion ($24 billion) although Riyadh is again expected to overshoot budgeted spending, according to the Riyadh-based Jadwa Investments .
Higher revenue will be a result of strong oil prices which are expected to average nearly $92 a barrel this year, around $13 below the $105 price in 2011. Saudi Arabia's crude output is also expected to fall back to nearly 8.8 million bpd from 9.3 million in 2011 as the Kingdom largely boosted its oil supplies to offset a disruption in crude exports by war-battered Libya.
The budget surplus will again allow Riyadh to cut its domestic debt to nearly SR115 billion or 5.5 per cent of GDP by the end of 2012 from SR136 billion or about 6.3 per cent of GDP at the end of 2011. The debt, which had accumulated in previous years because of persistent budget deficit and volatile oil prices, has sharply been trimmed from its peak level of more than 100 per cent of GDP in late 1990s and 40 per cent in 2005.
Jadwa expected the decline in oil prices and production to depress Saudi Arabia's nominal GDP by 4.1 per cent to SR2,074 billion in 2012 from SR2,163 billion in 2011 after soaring by 28 per cent in 2011.
But real GDP is projected to swell by about 3.1 per cent albeit much below the 2011 growth rate of 6.8 per cent. The report attributed the expected growth in 2012 to a 5.7 per cent expansion in the government sector and a five pr cent rise in the non-oil sector. It forecast a 3.3 per cent fall in oil GDP.
© Emirates 24|7 2012
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