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Saudi deficit contained in Q3 despite 25% oil revenue drop
[DUBAI] Saudi Arabia posted a fiscal deficit of 32.1 billion riyals (S$11.6 billion) in the third quarter this year, a big jump from the 7.3 billion riyals during the same period last year but 4 per cent less than the previous quarter.
The finances of the Gulf state, the world's largest oil exporter, have been hurt this year because of low crude prices and Opec-led production cuts.
Oil revenues dropped to 131.8 billion riyals from 174.9 billion riyals the previous quarter, a 24.6 per cent drop, a statement issued by the Saudi ministry of finance showed.
The drop follows attacks on Saudi oil plants in September which initially halved the kingdom's oil production but which, Saudi Arabia's Finance Minister said in September, had "zero" impact on government revenues.
"The fiscal data for 3Q point to a relatively limited impact from the attacks on Saudi Arabia's oil facilities in Abqaiq and Khurais in mid-September," Monica Malik, chief economist at Abu Dhabi Commercial Bank, said in a note.
"Whilst government revenue did fall on a quarterly basis … we believe that this was also partly a result of the lower average oil price and the targeted production cuts aimed at balancing the oil market."
Saudi Arabia told OPEC its oil production in September fell by 660,000 barrels per day (bpd) compared with August to 9.13 million bpd in the wake of the attacks.
The revenue drop was partly offset by a decrease in government expenditure, which dropped 18 per cent from the second quarter to 239.4 billion riyals.
Non-oil revenues dropped 12.2 per cent quarter-on-quarter to 75.4 billion riyals.
Riyadh, which aims to balance its budget by 2023, expects its deficit to widen to 187 billion riyals, or 6.5 per cent of gross domestic product (GDP), next year, from a projected 131 billion this year, or 4.7 per cent of GDP, the finance minister said last week.
In the year to September, it had a deficit of 37.8 billion riyals, meaning in the fourth quarter it is expected to post a deficit of over 90 billion riyals.