Saudi Arabia sees borrowing at $12bn in 2023

REUTERS/Ahmed Yosri

Saudi Arabia, the world’s top oil exporter, expects its financing needs to be around SAR45 billion ($12 billion) this year after pre-funding a larger amount in 2022, the National Debt Management Centre (NDMC) said.

Saudi finance minister Mohammed Al Jadaan approved the 2023 annual borrowing plan as well as a domestic sukuk issuance calendar, NDMC said in a statement. The kingdom raised about SAR48 billion for 2023 financing needs in pre-funding transactions in 2022, it added.

Earlier this month, Saudi Arabia raised $10 billion in a multi-tranche bond sale, taking advantage of a window to tap global debt markets amid continuing market volatility.

High oil prices helped Saudi Arabia’s fiscal balance tilt to its first surplus since 2013 last year, expected to be 2.6 percent of GDP. A consecutive, albeit narrower, surplus is forecast in 2023, clouded by global economic concerns and an uncertain oil price outlook.

Despite the expected surplus, the NDMC said Saudi Arabia will continue its funding activities in domestic and international markets to repay debt maturing in 2023 and in the medium term, as well as tapping markets opportunistically as part of its liability management strategy.

It also said it will consider borrowing more, subject to market conditions, to ensure its “continuous presence in debt markets and to enhance the kingdom’s debt portfolio characteristics, taking into account market movements and the government debt portfolio risk management”.

The sovereign debt portfolio rose by about SAR52 billion in 2022 to SAR990 billion, or 25 percent of GDP, down from 30 percent the previous year, but higher than NDMC’s estimate a year ago of SAR938 billion.

For 2023, it forecasts the debt portfolio to fall to SAR951 billion, or 24.6 percent of GDP.

Last year, the majority of about SAR125 billion in borrowing was raised domestically with roughly 15 percent raised internationally, a decline from almost 40 percent in 2021.

The split between domestic and international debt will be largely unchanged from 2022, NDMC said.