Saudi Arabia expects oil revenue to jump about 80 percent by 2023 to help the kingdom record its first budget surplus in a decade, according to people with knowledge of the matter.
Under a six-year program to balance the budget, officials predict rising oil prices and output will push income from oil sales to 801.4 billion riyals ($214 billion) from 440 billion riyals this year, the people said on condition of anonymity because they aren’t authorized to share the data publicly. It assumes the price of oil will reach $75 a barrel. Non-oil revenue, excluding income from the Public Investment Fund, would increase 32 percent to 337 billion riyals, they said.
While Crown Prince Mohammed bin Salman’s plan to transform the economy aims to reduce its reliance on oil in the long term, higher crude prices are central to efforts to support growth while introducing measures that would help boost revenue from other sources. The kingdom has led a drive among major non-OPEC members to stabilize oil markets through production cuts that have helped Brent crude prices exceed $60 a barrel.
The oil revenue forecast “looks challenging given the development in the shale industry,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “The strong oil revenue growth in 2017 will be difficult to repeat.”
Authorities expect oil production to increase from an average of 10 million barrels a day this year to 11.03 million barrels in 2023. For 2020, they predict output of 10.45 million barrels a day, generating 605 billion riyals in revenue, the people said.
(c) 2017, Bloomberg · Vivian Nereim, Wael Mahdi, Alaa Shahine