JEDDAH — Saudi Arabia’s foreign assets increased by nearly SR205 billion in the first half of 2012 after recording one of their biggest increases in 2011 amid strong oil prices combined with higher output, the Saudi Arabia Monetary Agency (SAMA) said in its latest monthly bulletin.
The Kingdom’s current account also shot up to $156 billion from $69 billion.
Buoyed by strong oil prices, Saudi Arabia announced a record high budget of SR690 billion for 2012 and analysts expect actual spending to end the year much higher as was the case in previous years.
The foreign assets of SAMA soared to an all time high of around SR2,263 billion at the end of June compared with SR2,057 billion at the end of 2011, it said. The increase was mostly in deposits with banks abroad as they soared to SR522 billion from SR414 billion and in investment in foreign securities, which swelled to nearly SR1,523 billion from SR1,427 billion in the same period.
Experts said the increased indicated the Kingdom is heading for another massive fiscal surplus through the year due to high oil prices and production.
In 2011, the assets leaped by about SR352 billion as a result of high oil prices and a sharp rise in the Kingdom’s crude output to an average 9.3 million barrels per day from around 8.2 million bpd, an increase of 1.1million bpd.
It was the biggest annual increase in the assets since 2008, when they rocketed by a whopping SR513 billion mainly because of a 50 percent rise in crude prices that allowed the country to record its highest fiscal surplus of SR580 billion.
The increase last year was also more than double the assets growth of around SR135 billion through 2010, when they ended the year at SR1,705 billion compared with SR1,570 billion at the end of 2009.
A surge in oil prices to a record high average of more than $105 a barrel allied with higher crude supplies to widen Saudi Arabia’s fiscal surplus to nearly SR307 billion in 2011 from SR87 billion in 2010.
Oil has registered a 20 percent gain since late June. Some investors have been buying because they fear a disruption of supplies from the Middle East while others hope that central banks will take more steps to promote economic growth.
Benchmark oil fell 32 cents to finish at $93.35 per barrel in New York Wednesday. Traders suggested oil should soon post more increases.
Brent crude, which is used to price international varieties of oil, gained 14 cents to finish at $112.14 per barrel in London.
After sharp falls in late 1990s, SAMA’s assets began their rapid rise in the following years because of high oil prices and a surge in the country’s crude output.
The year 2009 was an exception as they dipped by nearly SR130 billion following a decline in oil prices and production coupled with high spending as part of the government’s post-crisis fiscal stimulus measures.
Separetely, Saudi Arabia’s non-oil exports amounted to SR14.489 billion ($3.87 billion) in the first half of this year, a 7.7 percent decline compared to SR15.705 billion during the same period last year. — SG