Saudi Arabia’s foreign assets are forecast to reach a new peak of 1.9 trillion riyals ($506.6 billion) at the end of 2011 from 1,806 billion riyals in April due to strong oil prices and higher crude output, the National Commercial Bank (NCB) said.
Crude prices hovering at $100 a barrel have allowed Saudi Arabia, the world’s largest oil exporter, to experience robust revenues over recent months.
The kingdom had also boosted its crude supply to one of its highest levels of 9.4 million barrels a day to plug the gap in Libya’s output disrupted by civil unrest.
“We expect net foreign assets to reach close to 1.9 trillion riyals by the end of 2011 as Libya’s supply shortage will take time to recover, which will keep oil prices elevated for an extended period of time,” Saudi Arabian Monetary Agency Governor Muhammad Al Jasser said in a speech posted on the central bank’s Website.
The net foreign asset position of a country assesses the value of the assets the country owns abroad to reflect its indebtedness. The figure is minus the value of the domestic assets owned by foreigners.
The bank said that Saudi Arabia is no stranger to heavy foreign assets, adding that the kingdom’s policy of stockpiling foreign assets has not changed this year.
Meanwhile, Mr. Jasser said that the economic outlook for Saudi Arabia in 2011 is “encouraging and very positive.”
“The Kingdom posted a real gross domestic product growth of 4.1 percent in 2010 and expects an average rate of 4.3 percent in 2011. But the package of decisions taken by Custodian of the Two Holy Mosques King Abdullah recently to enhance the purchasing power of citizens and increase investment in housing and health may lead to higher growth estimates of around 6 percent for the current year,” he added.
Mr. Jasser said that the government will not tap into foreign assets to fund royal decrees announced earlier this year, such as new employment rulings to encourage more Saudi nationals to work.
(Eman El-Shenawi, Editor of Al Arabiya English, can be reached at: email@example.com.)