Oil income to help Saudis' personal wealth

Higher oil income will boost Saudi Arabia's personal wealth in 2010 after it tumbled by more than $4,000 (Dh14,680) in 2009 because of a sharp fall in crude prices and the country's oil output, according to a local study.

Despite an expected increase of about 800,000 in the kingdom's population by the end of 2010, its GDP per capita income will climb to around $15,774 from nearly $14,462 in 2009, said the study by Jadwa Investments.

Per capita income is projected to swell further to around $16,572 in 2011 as the country's oil exports will likely growth but it remains far below the record per capita of $19,151 achieved in 2008, when oil prices soared to an all-time high average of nearly $95 a barrel and Saudi Arabia's crude output was more than one million barrels per day above its 2009 production.

The Riyadh-based Jadwa, a key Saudi financial advisory company, said the kingdom's per capita income would grow this year although the population is projected to rise to nearly 26.3 million from 25.5 million in 2009.

Its assumption on the per capita, which is calculated by dividing GDP over population, was based on an increase in oil revenues to nearly $186.4 billion in 2010 from around $157.4bn in 2009. Total revenues were forecast to grow to around $215.7bn from $184.5bn in the same period.

The report projected the price of Saudi crude at an average $71.3 a barrel this year compared with $60.5 in 2009 while Saudi Arabia's crude production was projected to rebound to 8.3 million bpd from 8.1 million bpd.

The increase in both oil prices and production will likely push up Saudi Arabia's nominal GDP, the largest in the Arab World, to nearly SR1,554bn (Dh1,522bn) in 2010 from about SR1,384bn in 2009, according to Jadwa.

It will also turn a projected budget deficit of around SR70bn into a surplus of nearly SR23bn and reduce the public debt to SR220bn at the end of 2010 from SR225bn at the end of 2009. The debt had swelled to one of its highest levels of nearly SR660bn in 2003, close to the GDP.

Jadwa projected the kingdom's overseas assets, managed by the Saudi Arabian Monetary Agency (Sama) to rise to around $491bn at the end of this year from nearly $461bn at the end of 2009.

They are expected to continue rising to reach $519bn at the end of 2010, when oil prices could average around $75 and the kingdom's output rises to 8.5 million bpd.

Despite the expected rise, Saudi Arabia's per capita income remains low compared to other Gulf oil producers. The 2009 per capita of Qatar and the UAE stood at around $70,000 and 55,000 respectively and is projected to increase in 2010 because of higher oil prices and output.

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