Stock - Saudi economy / Riyadh skyline
Last year, the majority of about 125 billion in borrowing was raised domestically with roughly 15% raised internationally, a decline from almost 40% in 2021. Image Credit: Bloomberg

Dubai: Saudi Arabia, the world’s top oil exporter, expects its financing needs to be around 45 billion riyals ($12 billion) this year after pre-funding a larger amount in 2022, the National Debt Management Center said on Wednesday.

Saudi Finance Minister Mohammed Al Jadaan approved the 2023 annual borrowing plan as well as a domestic sukuk issuance calendar, NDMC said in a statement. The kingdom raised about 48 billion riyals for 2023 financing needs in pre-funding transactions in 2022, it added.

Earlier this month, Saudi Arabia raised $10 billion in a multi-tranche bond sale, taking advantage of a window to tap global debt markets amid continuing market volatility.

High oil prices helped Saudi Arabia’s fiscal balance tilt to its first surplus since 2013 last year, expected to be 2.6 per cent of GDP. A consecutive, albeit narrower, surplus is forecast in 2023, clouded by global economic concerns and an uncertain oil price outlook.

Despite the expected surplus, the NDMC said Saudi Arabia will continue its funding activities in domestic and international markets to repay debt maturing in 2023 and in the medium term, as well as tapping markets opportunistically as part of its liability management strategy.

It also said it will consider borrowing more, subject to market conditions, to ensure its “continuous presence in debt markets and to enhance the Kingdom’s debt portfolio characteristics, taking into account market movements and the government debt portfolio risk management.” The sovereign debt portfolio rose by about 52 billion riyals in 2022 to 990 billion riyals, or 25 per cent of GDP, down from 30 per cent the previous year, but higher than NDMC’s estimate a year ago of 938 billion riyals.

For 2023, it forecasts the debt portfolio to fall to 951 billion riyals, or 24.6 per cent of GDP.

Last year, the majority of about 125 billion in borrowing was raised domestically with roughly 15 per cent raised internationally, a decline from almost 40 per cent in 2021.

The split between domestic and international debt will be largely unchanged from 2022, NDMC said.