JEDDAH, 21 January 2004 — The decline of the US dollar last year raised Saudi Arabia’s import bill by $2.8 billion, a leading Saudi bank said.
Samba Financial Group said in a report obtained by Reuters yesterday the Saudi riyal, which is pegged to the US currency, depreciated by a little over seven percent against the currencies of Saudi Arabia’s trading partners.
“We calculated that the total additional cost to the Kingdom, based solely on the riyal’s depreciation against the nine major non-dollar currencies (of its trading partners) was SR10.49 billion ($2.8 billion),” Samba said.
But that was more than offset by an increase of more than $3 per barrel in the average price of Saudi oil exports in 2003 compared with the previous year, Samba figures showed.
At last year’s high production level of 8.7 million barrels per day (bpd), each additional $1 per barrel brought Saudi Arabia an extra $2.9 billion in revenues, the bank said.
Samba predicted an average $25 per barrel price for Saudi oil in 2004, down just $2 from last year, when high prices and production levels combined to produce only the second budget surplus in two decades.
Assuming average production levels of 7.7 million bpd this year, it said Saudi Arabia’s fiscal performance “will be stronger than budgeted.”
“Our forecast for overall fiscal performance for 2004 is for actual spending of SR255 billion, revenues of SR253 billion, and for a small SR2 billion deficit.”