The Saudi Ministry of Finance said, on Wednesday, that the country recorded an increase first annual budget surplus in nearly a decade, beating his own expectations in a year of High oil prices.
overflow for 2022 amounted to 102 billion Saudi riyals ($ 27 billion), an increase of 2.6%. of Gross domestic product according to preliminary estimates.
This is compared to an excess of 90 billion Saudi riyals, which was expected for 2022 at the end of last year.
The world’s largest exporter of crude oil also Preliminary Gross Domestic Product growth of 8.5% for the year, the ministry said, higher From the 7.6% expected by the International Monetary Fund.
The budget agreed for 2023 expects a surplus of 16 billion Saudi riyals ($4 billion) and GDP growth of 3.1%, according to the ministry.
Equally strong statements come out of The world dog with Spreading energy shocks and deepening fears about recession.
The Gulf kingdom benefited from oil price walking long distances triggered from Russia invasion of Ukraine that started in February.
Until now in surround with journalists in Riyadh on On Wednesday, Saudi Finance Minister Mohammed Al-Jadaan pressed back on The idea that surplus resulted from war.
Instead, he said, it reflects the kingdom’s investments made in Oil and gas sector as well growth in Non-oil sectors, where officials push the ‘Vision 2030’ agenda of economic diversification.
“We’ve invested a lot of money when people he did not do ” minister He said.
“We don’t celebrate excess us It’s not really big news. It’s something we expected. We have worked … to reduce our spending and increase our non-oil revenues. “
future ‘risk”
“Many of financial situation and growth story he is of a path directly associated with rising energy prices, and indirectly related to geopolitical factors events moving prices, ”said Robert Mogielnicki of Arab Gulf States Institute in Washington.
However, Saudi Arabia is to be commended for Fiscal adjustment and economic reforms, which have also The overall economic picture helped.”
After Justin Alexander, director of And while the surplus is “welcome,” Khalij Economics said, it could have been higher on condition original Projections appear to be in place on Oil prices of About $ 70 a barrel while the average over The year It will eventually be around $100 a barrel.
Economists say Saudi Arabia needs crude oil price of About $80 a barrel to balance its price budget.
The numbers are “close to the original budgeted level,” Alexander said. who he is also a analyst in consulting GlobalSource Partners.
So almost all windfalls from higher Oil prices have been spent and the ministry’s expectations indicate these levels of Spending will continue in Next years creating a risk If oil prices disappoint.”
Oil prices fell dramatically in Recent weeks though a decision made in October by the OPEC + oil cartel, which is jointly led by Riyadh with Moscow, to cut production by 2 million barrels per day.
This year’s surplus is the first since the 2014 crash of oil prices from more from $100 a barrel, prompting Riyadh to borrow heavily and take advantage of it financial Reserves to make up for budget shortfalls.
He. She also imposing austerity measures like cutting fuel and power Subsidies and levying value added tax.
Al-Jadaan said on Wed that such a ‘difficult decisions”It is unlikely that it will be reversed based on on overflow of this is year and expected surplus for next year.
“The last something we want It is actually to change policies in In a hurry “.
The surplus will be distributed in The first quarter of 2023, with Al-Jadaan said the majority would increase the kingdom’s reserves.
some of He said it would go into the National Development Fund and “may” transfer some to the sovereign wealth fund.
