Saudi assets edge down in June

Saudi Arabia’s foreign assets edged down slightly in June for the first time in five months and all the decline was in deposits with banks abroad.

But the assets, controlled by the Saudi Arabian Monetary Agency (SAMA) remained much higher than their level at the end of 2012 because of strong oil prices.

At the end of June, the assets stood at SR2,596.9 billion (Dh2,570 billion) compared with a record high of SR2,601.6 billion (Dh2,575 billion) at the end of May.

Figures by SAMA, central bank, showed the assets at the end of June were nearly SR111 billion above their level of about SR2,485 billion at the end of 2012.

A breakdown showed all the decline in June was in deposits with banks abroad as they dipped from SR498.7 billion at the end of May to SR466.2 billion at the end of June. But SAMA’s investment in foreign securities grew from around SR1,862.5 billion to SR1,877.8 billion in the same period.

In a recent study, a Saudi investment firm said it expected SAMA’s asset growth to slacken in the second half of 2013 due to overspending and an expected fall in crude prices over their average in 2012.

 “We maintain our view that the positive momentum in SAMA’s foreign assets is likely to slow over the coming few months relative to their strong growth last year as oil prices shift to below $105 per barrel and the Kingdom adjusts its production to an average of 9.6mbpd this year,” the Riyadh-based Jadwa Investment said .

It expected that Saudi Arabia, the largest Arab economy, would again overshoot budgeted expenditure as was the case in previous years due to a sharp rise in revenue.

The report projected actual spending at nearly SR870 billion compared with budgeted expenditure at SR820 billion. It said actual revenue could also surge to nearly SR1,047 billion in 2013 against budgeted revenue of SR829 billion.

In the first quarter of 2013, SAMA’s foreign assets swelled by around SR51 billion while year-on-year, they were higher by a whopping SR382 billion as they stood at about SR2,154 billion at the end of March 2012. They were also nearly double their level six years ago, when they stood at SR1,196 billion.

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