Saudi Arabia posted a multi-year high quarterly budget surplus of $15.3bn in Q1, as the economy was buoyed by surging oil prices. The figures from the Ministry of Finance came shortly after government statistics showed that the economy grew at its fastest rate in more than a decade last quarter (MEES, 6 May).

Riyadh is budgeting for a $24bn surplus for the year as a whole (see chart 1), its first in nine years (MEES, 17 December 2021), and the kingdom has gotten off to a strong start in chasing down that target. Given the geopolitical upheaval since that forecast was made in December 2021, and its impact on global oil prices, there is a good chance that Saudi Arabia exceeds its targeted surplus by a wide margin. Especially given that the move to push much of the capex responsibilities off-budget to entities such as the PIF sovereign wealth fund will help shield the budget from global inflationary pressures. (CONTINUED - 761 WORDS)