Higher oil prices help ease Saudi Arabia's public debt: AMF
ABU DHABI, April 3 (Xinhuanet) -- A surge in oil prices pumped an extra 33 billion US dollar into Saudi Arabia's coffers in 2003 and allowed it to reverse an upward trend in its debt for the first time in many years, a report from the Abu Dhabi-based Arab Monetary Fund(AMF) said.
The English daily Gulf News Saturday quoted the report as saying that the Gulf kingdom's public debt was estimated at around 173 billion dollar at the end of 2003 compared with nearly 181 billion dollar in 2002.
The decline slashed the ratio of the debt to the gross domestic product(GDP) to nearly 80 percent in 2003 from 94 percent in 2002, according to official figures.
"The decline in the debt for the first time in many years was a result of a sharp increase in oil prices in 2003. The increase alsoenabled the kingdom to record a large surplus in its budget for thesecond time in nearly two decades while its current account recorded a large surplus," the AMF's report said.
Citing Saudi government data, the Arab League's main financial institution said the kingdom's current account might record a smalldeficit in 2004 due to an expected decline in oil prices and production in the coming months.
Saudi Arabia's public debt has steadily increased over the past 15 years as the government had to resort to domestic borrowing to finance a persistent budget deficit caused by lower oil income and rising development needs.
The 2003 surplus in the current account is very important because it means the kingdom does not have to borrow from abroad. It is also important that the government take measures to tackle the budget deficit because it has announced more than once that it intends to issue balanced budgets in the current development plan. This will send a good signal to investors here and abroad.
The AMF report, citing preliminary Saudi estimates, said the kingdom's exports of goods are forecast to reach around 56.8 billion dollars this year while imports are projected at 31.1 billion dollar, with a trade surplus of nearly 25.7 billion dollar.
"As for the current account, it could record a deficit of around2.4 billion US dollar in 2004," the report said.
Announcing its 2004 budget in late December, Saudi Arabia projected revenues at 53.3 billion dollar and expenditure at 61.3 billion US dollar. But experts expect actual revenues to be higher as the government has forecast a price of 18 to 20 dollars for its crude. Enditem
http://news.xinhuanet.com/english/2004-04/03/content_1399436.htm Why are they spending billions of dollars on spreading Wahabbism?
They also spend the money on Hamas.