RIYADH, 13 October — Finance and National Economy Minister Dr. Ibrahim Al-Assaf said yesterday that he expected a smaller budget deficit this fiscal year than the huge $12 billion it forecast thanks to high oil prices.
“Financial indicators for the first three quarters of the year show there is an increase in revenues above estimates and a good compliance in expenditures,” Al-Assaf told reporters.
But Al-Assaf, who was speaking after attending a meeting of GCC finance ministers, ruled out a surplus in the budget as local economic reports have forecast.
“I don’t think there will be a surplus, but we aim at reducing the (budget) deficit this year,” he added.
Revenues for 2002 were projected at SR157 billion ($41.9 billion) and expenditures at SR202 billion ($53.9 billion).
Income from oil, projected at around $30 billion on the basis of a price of $16-17 a barrel, is expected to be much higher as the price of Saudi oil has been hovering above $25 a barrel since August.
Riyad Bank estimated that the Kingdom generated over $19 billion in oil revenue by the end of the first half of 2002.
Al-Assaf said in early July that Saudi Arabia, the world’s largest oil exporter, had generated more-than-expected revenue in the first six months due to higher oil prices.
The projected deficit is the Kingdom’s largest since a $13 billion shortfall in 1998, when oil prices crashed below $12 a barrel.
Al-Assaf said there was no plan to reschedule government debts, adding that his ministry was capable of paying the debts systematically.
He said the upcoming economic talks with Russia will cover oil cooperation. “There are good prospects for promoting commercial and investment cooperation with Russia,” he added.
