Saudi Revenues Jump 50% in 1st Half of 2022, with $36 Bn Surplus

The actual Saudi budget recorded a 49 percent growth in its performance for the half of 2022. (Asharq Al-Awsat)
The actual Saudi budget recorded a 49 percent growth in its performance for the half of 2022. (Asharq Al-Awsat)
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Saudi Revenues Jump 50% in 1st Half of 2022, with $36 Bn Surplus

The actual Saudi budget recorded a 49 percent growth in its performance for the half of 2022. (Asharq Al-Awsat)
The actual Saudi budget recorded a 49 percent growth in its performance for the half of 2022. (Asharq Al-Awsat)

In a performance that exceeded the targeted budget surplus for 2022, the Saudi Ministry of Finance disclosed on Thursday a record increase in revenues during the first half of this year, driven by a surge in oil prices and the fast growth of the non-oil sector.

Experts told Asharq Al-Awsat that energy prices and the non-oil sector were able to support Saudi Arabia’s general budget, thanks to the Kingdom’s diversification of revenue sources and the financial reforms it has been leading for years.

The recent figures confirm the strength of the Saudi economy, which has seen a remarkable growth, despite the recent successive crises, including the Covid-19 pandemic and the Russian-Ukrainian war, according to the experts.

The budget performance during the second quarter of 2022 witnessed revenues exceeding 370.3 billion riyals (USD98.7 billion) and expenditures amounting to 292.4 billion riyals (USD77.9 billion), with the budget recoding a surplus of more than 77.9 billion riyals (USD20.7 billion).

As for the actual performance of the Saudi budget for the half-year, the revenues recorded a surplus of 135.3 billion riyals (USD36 billion), with the volume of realized revenues reaching 648.3 billion riyals (USD172.8 billion), compared to expenses that exceeded 512.9 billion riyals (USD136.7 billion).

Oil revenues during the first half of 2022 amounted to 434 billion riyals (USD115 billion), registering an increase of 75 percent compared to the same period last year.

Non-oil revenues in the first half of this year amounted to 214.2 billion riyals (USD57.1 billion), compared to 204 billion riyals (USD54.4 billion) in the same period last year, recording an increase of 5 percent.

The mid-term budget, which was announced on Thursday, bore a very positive indicator about the performance of public finances in Saudi Arabia. The surpluses achieved during the first six months of 2022, which amounted to USD36 billion, exceeded all previous government estimates.

In this regard, Dr. Abdullah bin Rabeean, academic and economic advisor to Asharq Al-Awsat, said that the excellent performance of the Saudi general budget during the second quarter and the first half of 2022 was the result of the measures taken to reduce financial squandering.

He added that these figures came at a time when the global economy was undergoing multiple crises that impede growth.

The economic advisor further stressed that non-oil revenues saw a good increase of 5%, which confirms the Kingdom’s success in achieving economic reforms and diversifying the sources of income, in line with Vision 2030.

For his part, Economic Expert Ahmed Al-Shehri told Asharq Al-Awsat that the high budget surplus has emphasized the success of the financial reforms undertaken by the Saudi government, at a time when most countries were suffering from economic stagnation.

The government was able to achieve growth in its revenues, while it increased its actual expenditures by 10 percent during the first half of 2022, in order to implement its mega projects within the plans and programs of its Vision 2030, he added.



China's Yuan Hits Post Financial Crisis Low as Trade War Ramps Up

A Chinese Yuan banknote, US and Chinese flags are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration
A Chinese Yuan banknote, US and Chinese flags are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration
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China's Yuan Hits Post Financial Crisis Low as Trade War Ramps Up

A Chinese Yuan banknote, US and Chinese flags are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration
A Chinese Yuan banknote, US and Chinese flags are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration

China's yuan hit its lowest against the dollar since the global financial crisis on Thursday, with the central bank cutting guidance for the sixth successive trading session amid an intensifying Sino-US trade war.

Beijing has imposed steep tariffs on US imports in response to similar US action. Though US President Donald Trump said he would temporarily lower duties recently imposed on dozens of countries, he increased those on Chinese goods.

"The US and China are currently in a powerplay game of brinkmanship," said ING global head of markets Chris Turner.

"Until a deal is announced or a big, bilateral meeting confirmed, USD/CNY will now be the focal attention of the FX market."

A weaker yuan would make Chinese exports cheaper and alleviate tariff impact on the economy. However, a sharp decline could also increase unwanted capital outflow pressure and risk financial stability, analysts and economists said.

The central bank will not allow sharp yuan declines and has instructed major state-owned lenders to reduce dollar purchases, people with knowledge of the matter told Reuters.

The onshore yuan slipped to 7.3518 a dollar in early trade, its weakest since December 26, 2007. It pared intraday losses and traded 0.02% higher at 7.3428 as of 0516 GMT, but was still down about 1.2% this month.

Its offshore counterpart was at 7.3558 at 0516 GMT, down 0.14%. It hit an all-time low of 7.4288 on Tuesday.

Prior to market open, the People's Bank of China set the midpoint - around which it allows the yuan to trade in a 2% band - at 7.2092, the weakest since September 11, 2023. That compared with the 7.3484 Reuters estimate.

The central bank has been lowering the midpoint at a measured pace, with Thursday's cut contributing to the day's decline, traders said.

The PBOC loosened its grip on the yuan this week by allowing the currency to weaken past 7.2. Still, its guidance is stronger than market projections in what traders and analysts interpreted as an attempt to keep the yuan steady.

The steadily weaker guidance dragged down its value against major trading partners. The CFETS yuan basket index, a gauge that measures the yuan against a basket of currencies, fell to 98.18 on Thursday, the lowest since September 2024, according to Reuters calculations based on official data.

The bank is focusing on a steady yuan even as the trade war challenges the competitiveness of China's export sector, indicating that stability remains the priority.

"A modest, gradual depreciation of the yuan is still the preference," Societe Generale economists said in a client note.

China will only allow gradual depreciation as stability matters for confidence in Chinese assets, and the tariffs are "just too big to be offset by FX depreciation," they said.

Separately, China and Hong Kong shares rose on Thursday. The Hong Kong dollar hovered near a four-year high against the dollar on persistent inflows through the southbound leg of the stock trading link. It last traded at 7.7616 as of 0516 GMT.

Mainland investors purchased more than HK$35 billion ($4.51 billion) worth of Hong Kong stocks on Wednesday, the highest on record.

Marco Sun, chief financial market analyst at MUFG Bank, said a strong Hong Kong dollar was critical for the financial hub during times of heightened financial market volatility.

"And the renminbi is likely to enter a period of orderly depreciation," he said.