RIYADH, (Reuters) – Saudi Arabia will book a 91 billion riyal ($24.3 billion) surplus this year based on an average oil price of $75 per barrel, and will avoid a deficit if prices stay above $60, a state-owned bank said on Tuesday.
The kingdom may end up spending 12 percent above the 540 billion riyals it budgeted for 2010 and get revenues 48 percent above the planned 385 billion riyals, said Said al-Shaikh, chief economist at National Commercial Bank (NCB).
“Crude oil prices, based on a modest recovery in global demand, are expected to average $75 (per barrel) with Saudi production rising to 8.3 million barrels per day,” Shaikh told a conference.
The government has said it expects to make a 70 billion riyal deficit in 2010, implying a conservative $46 per barrel price for oil.
Saudi authorities do not issue updates on progress made in the execution of the budget.
The kingdom has stepped up public expenditure over the past two years to counter the effects of the global crisis, drawing on reserves that more than doubled due to Saudi Arabia amassing substantial revenues from oil exports as crude prices rallied to record levels in 2008.
The kingdom is investing $400 billion in the five years to 2013 mainly to enhance infrastructure in the country of 26 million people.
After declining by almost 8 percent in 2009, net foreign assets held by the Saudi central bank are set to rise by almost 10 percent in 2010 to $445.2 billion, surpassing their lifetime record of 2008, Shaikh said, based on assumptions of daily production of 8.3 million barrels per day and a $75 average price for oil.
This could yield economic growth of 3.5 percent in 2010, up from 0.2 percent in 2009, he said. Non-oil sector growth is set to reach 3.8 percent in 2010, up from 3 percent in 2009.
With an oil price of $60, the Saudi economy would be able to grow 2.2 percent in 2010, with the non-oil sector adding 2 percent, Shaikh added.