31/12/2010 00:00 AST
Saudi Arabia’s foreign assets surged by more than SR1.7 billion ($4.5 billion) in November 2010, from around SR1.66 billion at the end of October 2010, nearly SR110 billion in 11 months due to high oil prices, data released by the Saudi Arabian Monetary Agency (SAMA) showed.
Representing the highest increase in foreign assets for 2010, it shows the impact on Saudi Arabia’s income of the strong oil prices, allowing the government to acquire more foreign assets.
Foreign assets comprised mainly bank deposits which grew from around SR333.8 million, at the end of October, to SR339.8 million and investments in securities, which rose from SR1.152 billion to SR1.159 billion.
It was one of the largest increases in SAMA’s assets this year and it indicated that the Kingdom earns more than it spends, which explains the massive surplus recorded in its 2010 budget.
From around SR619 billion at the end of 2005, the assets leaped to nearly SR884 billion at the end of 2006 and to around SR1,196 billion at the end of 2007. They hit an all time high of SR17,09 billion at the end of 2008 before receding to nearly SR1,570 billion at the end of 2009. They rebounded to about SR1,605 billion at the end of February because of stronger oil prices.
The increase in SAMA’s assets in November was mainly in its deposits with banks abroad and investment in foreign securities.
Bank deposits grew from around SR333.8 billion at the end of October to SR339.8 billion at the end of November while investments in securities rose from nearly SR1,151.7 billion to SR1,158.9 billion.
The figures showed that by the end of November, SAMA’s foreign assets have gained nearly SR110 billion since the end of 2009, when they stood at SR1,570 billion. At the end of November, the assets were more than double their level of nearly SR620 billion at the end of 2005.
Analysts said the surge in the assets in October and November indicated Saudi Arabia’s earnings have largely surpassed its actual expenditure despite a steep rise in the Kingdom’s actual expenditure.
Saudi Arabia projected a budget deficit of around SR70 billion in 2010, but it turned into a surplus of about SR108.5 billion, according to official data.
The surplus was against a deficit of nearly SR86 billion in 2009, when spending hit another record and the Kingdom’s income sharply declined because of lower oil prices following the 2008 global fiscal crisis.
Saudi Arabia, the largest Arab economy, SAMA’s assets have steadily increased over the past few years because of strong oil prices, which allowed the Kingdom to record massive fiscal and current account surpluses after several years of deficits.
Saudi Gazette
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