Higher oil prices will ally with record spending to boost Saudi Arabia's economy by more than $24 billion in current prices this year to maintain its position as having the largest economy in the Middle East, according to a local study.
The increase will widen the Gulf Kingdom's GDP per capita to its highest ever level in 2013 despite a projected rise of around 900,000 in its population, showed the study by the Riyadh-based Jadwa Investments.
From around SR2,727 billion ($727.3 billion) in 2012, the country's nominal GDP is expected to swell to an all time high of about SR2,819 billion ($751.6 billion) in 2013, an increase of nearly $24.3 billion, the report showed.
GDP per capita, which is calculated by dividing GDP over the population, is projected to peak at around SR24,926 in 2013 compared with SR24,859 in 2012.
The per capita in 2013 will be the highest in the history of the world's largest oil exporter and nearly 52 per cent higher than the 2009 per capita of SR16,417.
GDP per capita will still climb this year despite an expected increase of 900,000 in Saudi Arabia's population to a record 30.2 million from 29.3 million at the end of 2012.
Saudi Arabia, sitting atop over a fifth of the world's recoverable oil deposits, has announced a record budget of SR820 billion for 2013 as it was buoyed by strong oil prices, high crude output and a massive increase in its foreign assets. It assumed revenue at around SR829 billion, creating a surplus of SR9 billion.
But Jadwa expected the actual surplus to leap to nearly SR178 billion on the back of higher oil prices which it projected at $104 for Brent and $99.4 for Saudi crude, way above Riyadh's assumed price of around $70 a barrel. It forecast actual revenue to rocket to nearly SR1,047 billion and spending to surge to SR870 billion.
The report said the surge in revenue would allow Saudi Arabia to further cut its public debt to SR90 billion at the end of 2013, less than a quarter its 2006 level of SR365 billion. The country's foreign assets are also expected to rise to their highest ever level of nearly $695.8 billion from $648.7 billion.