Saudi Arabia Forecasts Budget Surplus of 12 Billion Riyals
Saudi Arabia is an oil-based economy with strong state controls. The Kingdom of Saudi Arabia is the biggest exporter of petroleum in the world. When planning for their budget, they traditionally use a conservative price for oil of around $60 per barrel. If oil prices surge higher, then revenue and surplus levels next year will surpass the estimate. Saudi Arabia is forecasting a budget surplus of 12 billion riyals (US$ 3.2 billion) next year.
The Kingdom of Saudi Arabia is boosting domestic spending to create jobs, fund housing, and modernize defenses.
In 2011, the Kingdom of Saudi Arabia increased government spending sharply to fund social welfare developments. According to the Saudi Arabian Finance Ministry, King Abdullah ordered the transfer of 250 billion riyals from the 2011 budget surplus to the account of the Saudi Arabian Monetary Fund to finance the construction of 500,000 housing units that were approved in March.
On another note, the Saudi Arabian Monetary Agency (SAMA) is in discussion with several financial institutions about issuing riyal-denominated sukuks. Saudi Arabia wants to drain some liquidity from the domestic market.
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