JEDDAH, 4 August 2004 — The Kingdom is heading for a budget surplus of SR56 billion ($14.9 billion) in 2004 on the back of rising oil prices, the National Commercial Bank said in a report yesterday.
“The forecast budget deficit of SR30 billion will be offset by a surplus of 56 billion riyals,” said the report, published in Al-Jazirah newspaper.
The Kingdom has been enjoying the windfall of unexpected hikes in oil prices to above $40 a barrel. Oil revenues are estimated at SR248 billion while total revenues will hit SR296 billion, said the bank.
The Saudi financial group Samba said last month it predicted a record budget surplus this year of SR112 billion.
The government has projected total revenues of SR200 billion based on the conservative oil-price forecast of $19 per barrel.
The Kingdom posted a $12 billion surplus in the 2003 fiscal year, the first non-deficit budget since 2000, thanks to a rise in oil prices.
According to agency reports, oil prices hit fresh record highs above $44 a barrel yesterday after the head of OPEC said there was no extra oil around the corner to dampen red-hot markets.
Saudi Arabia has said it would produce 9.5 million barrels per day (bpd) in August, which would be just one million bpd below the country’s full capacity. At the current production level of eight million bpd.
Saudi oil reserves might not face depletion for at least 73 years, said a recent British Petroleum report. The reserves amount to an estimated 262 billion barrels of oil, ranking Saudi Arabia the first among all oil-producing states.
Per Capita Income Drops
Meanwhile, per capita income of Saudis has declined by 60 percent since 1980, Al-Yaum Arabic daily reported yesterday quoting Dr. Ibrahim Quwaider, director general of Arab Labor Organization. He also estimated unemployment rate in the Gulf region at 6 to 17.5 percent.
Presenting a working paper recently, he said women accounted for 25 percent of the total workforce (104 million) in Arab countries, adding that the rate was lowest in the world. He said some 2.5 million people are added to Arab labor market every year.
“Arab countries require investment worth $70 billion to solve their growing unemployment problem,” the ALO chief said, adding that Arab countries make an annual loss of $115 billion as a result of unemployment.
Arab labor productivity in the industrial sector is estimated at $800 annually against $60,000 in industrialized countries. “Arab countries receive only two percent of foreign investment. The rest goes to Latin American (36 percent) and Asian countries (59 percent,” he pointed out.
Quwaider said about 74 million from a total of 290 million Arab population live below the poverty line, adding that one out of every five Arabs earn less than two US dollars daily. Total Arab GDP is valued at $660 billion, the GDP of a single country like Spain or Italy.
