Saudi Arabia's foreign assets grew by more than SR40 billion in June to push them to their highest ever level, Saudi Arabian Monetary Agency (SAMA) said in its monthly bulletin for July, on account of strong oil prices and a surge in the Kingdom's crude output. Against this backdrop, the Kingdom is expected to register a fiscal surplus by the end of the year. For 2011, Saudi Arabia announced another record high budget of SR580 billion for 2011, with a deficit of SR40 billion. National Commercial Bank (NCB) said earlier the 2011 deficit could turn into an actual surplus of around SR77 billion. "We believe that revenues are underestimated, and the government will still manage to record a surplus in 2011. With our forecast of $80 for the average Arabian light spot prices and an 8.5 million bpd for average oil production in 2011, we project revenues and expenditures at SR753 billion and SR677 billion, respectively. This would lead in turn to a budget surplus of SR77 billion, or 4.2 per cent of estimated GDP in 2011," NCB said. From SR1,856.2 billion ($495 billion) at the end of June, total foreign assets controlled by SAMA soared to an all time high of SR1,897 billion ($505.8 billion) at the end of June. As a result, Saudi Arabia's foreign assets swelled by a whopping SR192 billion in the first half of 2011, the biggest increase in such a period of time, according to financial analysts. A breakdown showed SAMA's deposits with banks abroad grew from SR360.1 billion at the end of May to SR372.5 billion at the end of June. Investment in foreign securities swelled from SR1,293.8 billion to SR1,321.3 billion. Foreign currencies and gold rose from SR154.5 billion to SR156.5 billion while other "miscellaneous" assets slipped to SR23.3 billion from SR24 billion. Saudi Arabia's foreign assets recorded one of their largest increases of nearly SR513 billion during 2008, when oil prices climbed to their highest annual average of nearly $95 a barrel. But a sharp fall in crude prices depressed them by SR139 billion in 2009. In 2010, the budget reverted into a surplus of SR109 billion after oil prices increased by at least $15 a barrel. But analysts believe the shortfall will again revert into a surplus at the end of the year on the grounds the oil price assumed by Riyadh of just under $60 will be far below the expected actual price. In the first six months of 2011, crude prices averaged nearly $100 a barrel and could remain relatively high through 2011.
