JEDDAH – Saudi Arabia's budgeted fiscal surplus for 2013 could end the year nearly 30 times higher because of an expected surge in oil export earnings as a result of high prices, the National Commercial Bank (NCB) said in a study on the Saudi budget. The Kingdom projected revenue at SR829 billion in 2013 and expenditure at a record high of SR820 billion, with a surplus of SR9 billion. NCB said strong oil prices would allow Saudi Arabia to record another large current account surplus albeit slightly lower than in 2012 and 2011. It forecast the surplus at around $144 billion this year against $179 billion in 2012 and $158 billion in 2011. Global oil prices edged higher Wednesday in cautious deals ahead of a key vote on extending the debt ceiling in the United States, which is the world's biggest crude consuming nation. Brent North Sea crude for delivery in March gained 21 cents to $112.63 a barrel in London deals. New York's main contract, light sweet crude for March, won 18 cents to $96.86 per barrel. “Crude oil prices are on a consolidation mode on Wednesday morning, struggling to find some direction,” said analyst Myrto Sokou at brokers Sucden Financial Research. The NCB report showed the large surpluses would sharply boost the Kingdom's net foreign assets to an all time high of about $710 billion at the end of 2013, an increase of nearly $70 billion from 2012. The assets, controlled by the Saudi Arabian Monetary Agency (SAMA), central bank, had already gained over $100 billion through 2012. The government is believed to have assumed an oil price of $70 for the budget but prices could average as high as $110 this year, the study added. “Based on our forecast of oil prices at $110 a barrel, we project a fiscal surplus of SR277 billion or 9.5 percent of GDP,” NCB said. “This will result in oil revenues of SR1,043.5 billion, representing a decrease of 8.5 percent compared to actual oil revenues in 2012, which also takes into account a 3.7 percent decline in export volume. Non-oil revenues are also expected to reach SR104 billion, 3.9 percent above actual level in 2012.” The study forecast also that the Kingdom would exceed its budgeted spending this year, projecting a 6.1 percent rise to SR870 billion. The study also forecast that real GDP would grow by around 3.4 percent this year, far lower than the 6.8 percent rate recorded in 2012 and 8.5 percent in 2011. — SG/Agencies
