Riyadh expects balanced budget by 2023
RIYADH: Saudi Arabia expects oil revenue to jump about 80 per cent by 2023 to help the kingdom record its first budget surplus in a decade, said sources.
Under a six-year programme to balance the budget, officials predict rising oil prices and output woul push income from oil sales to 801.4 billion riyals (RM874.5 billion), from 440 billion riyals this year, the sources added.
It assumes the price of oil will reach US$75 (RM307) a barrel.
Non-oil revenue, excluding income from the Public Investment Fund, would increase 32 per cent to 337 billion riyals, they said.
While Crown Prince Mohammed Salman’s plan to transform the economy aims to reduce its reliance on oil in the long term, higher crude prices are central to efforts to support growth through measures that would help boost revenue from other sources.
The kingdom has led a drive among major non-Organisation of the Petroleum Exporting Countries members to stabilise oil markets through production cuts that have helped Brent crude prices exceed US$60 a barrel.
The oil revenue forecast “looks challenging given the development in the shale industry,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
“The strong oil revenue growth this year will be hard to repeat.”
Authorities expect oil production to rise from an average of 10 million barrels a day this year to 11.03 million barrels in 2023.
For 2020, they predict output of 10.45 million barrels a day, generating 605 billion riyals in revenue, said the people.
The scenario may signal that the world’s biggest oil exporter doesn’t currently see a need to extend the agreement to cut production beyond next year as a global supply glut eases.
Easing austerity measures “could prove premature if oil prices disappoint”, said JeanMichel Saliba, an economist at Bank of America Merrill Lynch in London. Bloomberg