That came on top of a record 2011 government budget of 580 billion riyals ($154 billion), raising the possibility that Saudi Arabia might have to dip into its fiscal reserves, estimated by analysts at about $280 billion, to fund spending.
But Alassaf said he saw no need for this, since robust oil prices had helped to fill state coffers. “We have 2-1/2 months until the end of the year and lots of things can happen, but I would expect that we wouldn’t need to tap into our reserves,” Alassaf said.
“Yes we have higher expenditure than projected, but we have higher revenues than projected,” he said on the sidelines of a meeting of Gulf Arab finance ministers and central bankers in Abu Dhabi. The interview was conducted Friday but embargoed for release until Monday. Analysts polled by Reuters in September predicted Saudi Arabia would book a big budget surplus of 11 percent of gross domestic product this year. But its fiscal position is very sensitive to the level of oil prices and it has run large deficits in the past when prices have been weak.
On average, analysts estimated the country would need a Brent crude oil price of $75 per barrel to balance its budget this year; the price is now well above that, at about $110. If Saudi Arabia continues its heavy spending plans, however, the breakeven price could rise near $90 next year, analysts say. The Saudi government has little debt; the International Monetary Fund has estimated gross public debt will fall as low as 7.1 percent of GDP this year.Newswire