Riyadh, Asharq Al-Awsat- Saudi Arabia on Monday posted a budget surplus of 306 billion riyals (81.6 billion) for 2011 as its income beat forecasts by more than double, according to official figures.
The government expects to spend 690 billion riyals ($184 billion), 19 percent above its target for this year and below actual spending of 804 billion riyals ($214 billion), the Riyadh-based Finance Ministry said on its website. Total revenue next year is projected at 702 billion riyals ($187 billion), above last year’s target of 540 billion riyals ($144 billion) and below this year’s actual revenue of 1.11 trillion riyals ($296 billion).
The Custodian of the Two Holy Mosques King Abdullah, unveiled the budget during a special Cabinet session at Al-Yamamah Palace in Riyadh, said that the budget is aimed at strengthening the Kingdom’s development and creating more jobs for Saudis.
“The idea of a ‘record budget’ is psychologically important for the business community and investors,” Paul Gamble, head of research at Jadwa Investment Co., told the Bloomberg news agency. “It shows that the government stimulus that has been the main source of economic growth in recent years will remain in place.”
The country had a surplus of 306 billion riyals ($81.6 billion) this year, compared with the 40 billion-riyal ($10.7 billion) deficit foreseen in the budget announced a year ago. The kingdom’s public-sector debt will fall 18.8 percent to 135.5 billion riyals ($36.1 billion) this year, the ministry said.
Finance Minister Ibrahim al-Assaf said GDP was expected to grow by 6.8 percent this year.
He also said public debt was expected to drop to 135.5 billion riyals ($36.1 billion) by the end of 2011, or 6.3 percent of GDP, from 167 billion riyals ($44.53 billion) at the beginning of the year.
Saudi Arabia traditionally uses a conservative price for oil of around $60 per barrel in its budget forecast.
The kingdom pumped crude over its quota this year to cover for a shortage resulting from the conflict in Libya.
Saudi oil minister Ali al-Naimi said earlier this month that Riyadh’s current output level was 10.047 million barrels per day, significantly higher than its quota of 8.05 million bpd.
Earlier in the year, King Abdullah announced a $130 billion public spending plan that largely benefited the kingdom’s lower income population. The funds were aimed at building hundreds of thousands of housing units, as well as creating jobs, raising salaries and offering unemployment benefits.