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Saudi Arabia posts almost $21bn Q2 surplus on high oil prices

Reuters / Ahmed Jadallah
Saudi Arabia raised prices for the flagship Arab light crude it sells to Asia for a third month in May
  • Revenue in the second quarter reached SAR370.37 billion
  • Expenditure stood at SAR292.46 billion

Saudi Arabia has registered a budget surplus of nearly SAR78 billion ($21 billion) in the second quarter of 2022, the finance ministry said on Thursday, an almost 50 percent rise from a year earlier, bolstered by high oil prices.

Revenue in the second quarter reached SAR370.37 billion and expenditure was SAR292.46 billion, the ministry said.

“A widening in the fiscal surplus was expected in 2Q with the higher oil price and production level,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “Government spending strengthened, though (it) still remains broadly in line with the budget plans.”

Saudi Arabia has pledged to “decouple” state spending from oil price fluctuations. Its expected surplus for 2022 – which would be its first in nearly a decade – will sit in the government’s current account until the government’s finance committee decides how to allocate it, likely early next year.

Finance Minister Mohammed Al-Jadaan told Reuters in May the surplus could go towards the Public Investment Fund (PIF), Saudi Arabia’s $600 billion sovereign wealth fund, and the National Development Fund (NDF).

The excess may also go to foreign reserves at the central bank. As part of a fiscal sustainability policy, the kingdom is in the final stages of determining a floor and ceiling for reserves, as a percentage of GDP.

Oil revenue was SAR250.36 billion an 89 percent surge compared with a year before, the ministry said. That was equivalent to just over two thirds of total government revenue, while non-oil revenue was SAR120 billion, a 3 percent increase.

The kingdom posted a first-quarter surplus of more than SAR15.3 billion.

Spending in the first half of 2022 was up 10 percent compared with the first half of last year, while revenue jumped 43 percent, the finance ministry said.

At the end of June, the government had reserves of SAR318.65 billion and a current account surplus of SAR131.45 billion.

Domestic debt rose to SAR604.76 billion at the end of June from SAR558.75 billion at the end of 2021. External debt was down to SAR361.76 billion from SAR379.26 billion in the same period.