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Sagia: Oil price drop will not hinder Saudi development

A declining oil price will have little impact on development plans for Saudi Arabia this year, according to a senior executive at the Saudi Arabian General Investment Authority (Sagia).

Abdulmohsen Al-Badr, chief executive officer of Sagia's Global Competitiveness Forum, says the huge surplus accumulated by the kingdom over the past few years through record oil prices will ensure that development will continue through 2009.

"The deficit is something like SR65bn [$17.35bn] for 2009, but that will not amount to debt," he says. "The surpluses we have over 2008 and before will sustain spending."

Sagia is responsible for one of the largest development projects in the kingdom, overseeing plans for six new economic cities at sites around the country.

In November, King Abdullah bin Abdulaziz al-Saud announced that SR1.5 trillion will be spent over the next five years on infrastructure and other government projects.

However, Riyadh is expected to post a budget deficit this year - the first time it will have done so since 2002.

The Finance Ministry says that spending is projected to rise by 16 per cent to SR475bn, despite a dramatic fall in projected government revenues, from SR 1.1 trillion this year to SR410bn next year (MEED 23:12:08).

Source: MEED