Macroeconomic Forecast Saudi Arabia

Our budget balance forecasts for Saudi Arabia have changed markedly since our last fiscal policy analysis, and we now project a fiscal surplus of 2.2% of GDP in 2011, rather than a deficit, due to an upward revision to our oil price forecasts and a short-term ramp-up in oil production. With oil receipts comprising approximately 85% of total fiscal revenues, price and volume will have a major bearing on the health of Saudi Arabia's coffers. Beyond 2011, however, we foresee the budget falling into deficit, as oil revenues decrease while fiscal expenditures remain elevated, and we forecast a deficit of -0.3% of GDP in 2012.

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