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Dubai: Saudi Arabia's foreign reserves will increase 65 per cent to $595 billion by the end of 2010 on record fiscal surpluses, EFG-Hermes Holding SAE said.
The kingdom's fiscal surplus will peak at 23.5 per cent of gross domestic product in 2008, and hold above 15 per cent of GDP in 2009 and 2010, EFG-Hermes, Egypt's largest investment bank, said in an e-mailed report yesterday.
Record earnings from oil sales are filling the coffers of Gulf Arab states, providing them with funds to maintain government spending even if crude sales fall. The majority of Saudi Arabia's foreign reserves are managed by the Saudi Arabian Monetary Agency which invests largely in government securities.
"We forecast that net foreign assets will increase to 93.7 per cent of GDP by the end of 2008 and 109.7 per cent of GDP by the end of 2010,"Monica Malik, chief economist at EFG, said.
Saudi Arabia plans to start a sovereign wealth fund with $5.3 billion this year, to be managed by The Saudi General Investment Fund.
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