In this list

Saudi Arabia forecasts lower growth, revenue for 2023 amid uncertain global economic outlook

Crude Oil

Platts Crude Oil Marketwire

Commodities | Crude Oil | Electric Power | Electric Power Electricity | Energy Natural Gas | Energy Transition | Natural Gas

Market Movers Europe, Dec 4-8: Oil markets weigh OPEC+ cuts, economic factors; power sector watches for cold weather

Oil | Energy Transition | Energy

APPEC 2024

Natural Gas | Oil & Gas | Crude Oil

Putin's Middle East trip aims to boost flagging OPEC+ credibility, Russian power-broking

Energy | Oil | Crude Oil

Dated Brent Price Assessment

Agriculture | Grains | Crude Oil | Energy Transition | Emissions | Natural Gas | Oil & Gas

Commodity Tracker: 6 charts to watch this week

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

Saudi Arabia forecasts lower growth, revenue for 2023 amid uncertain global economic outlook


Growth seen at 3.1% for 2023, down from 8% in 2022

Budget based on Brent oil price of about $76/b: Al-Rajhi Capital

Country needs $69/b oil price in 2023 to balance budget: IMF

  • Author
  • Dania Saadi
  • Editor
  • Claudia Carpenter
  • Commodity
  • Oil

Saudi Arabia has forecast a lower GDP and fiscal revenue, including crude income, for 2023 as the world's biggest oil exporter bases its budget on a conservative scenario that takes into account the global economic outlook.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Saudi Arabia, which is forecasting a decade-high economic growth of 8% for 2022, is projecting its GDP will slow to 3.1% growth in 2023, the ministry of finance said in a preliminary 2023 budget report released on Sept. 30.

The International Monetary Fund is projecting Saudi Arabia's economy will grow 7.6% in 2022 and 3.7% in 2023.

Saudi Arabia is also forecasting its total revenue, including oil income, will drop in 2023 in a conservative baseline scenario.

The ministry's preliminary estimates are projecting an 8.1% decline in fiscal revenue to Saudi Riyals 1.123 trillion ($299 billion) in 2023 from a year earlier.

"This is due to the direction that the government is adopting in basing the estimates of oil and non-oil revenues in the budget on conservative standards in anticipation of any developments that may occur in the domestic and global economy," the ministry said.

Breakeven oil price

The ministry didn't disclose the oil price figure for basing the 2023 revenue decline.

The budget is likely based on a Brent oil price of about $76/b, Riyadh-based Al-Rajhi Capital said in a Sept. 30 report.

Brent oil prices fell 2.3% to $85.14/b on Sept. 30, capping a quarterly drop fueled by worries about the global economy.

In April, the IMF projected that Saudi Arabia would need a breakeven oil price of $79.20/b and $69/b to balance its fiscal budgets for 2022 and 2023 respectively.

Oil prices have erased gains achieved since Russia's invasion of Ukraine on Feb. 24 as investors fret about economic recession, high inflation and a strong dollar.

Platts benchmark Dated Brent was assessed on Sept. 30 at $87.92/b, down 2.1% on the day, according to S&P Global Commodity Insights data.

The price, which reached $137.64/b on March 8, is up about 14% this year.

The oil price drop from March highs and recession worries may prompt OPEC+ minister meeting on Oct. 5 to decide to cut production levels for November.

Although OPEC+ ministers are careful to insist their decisions do not target prices, a slide in crude futures to near nine-month lows—and their first quarterly loss since 2020—may change their minds.

Potential OPEC+ production cut

OPEC+ has summoned at short notice oil ministers and delegates to Vienna on Oct. 5 for physical talks on potential production cuts, abandoning its previous plan for the meeting to be held online via video conference call.

Saudi energy minister Prince Abdulaziz bin Salman called for the in-person talks, delegates said, and will be in Vienna, along with ministers from Saudi Arabia's close Gulf allies the UAE and Kuwait. Iraq, Algeria and Congo-Brazzaville will also send their ministers, delegates said.

OPEC and its allies are preparing a package of potential production cuts, according to delegates, as they try to backstop the slump, even though their own analysis forecasts a healthy surge in demand ahead.

Having decried what they view as a disconnect between futures prices and market fundamentals, ministers could announce a cut of as much as 1 million b/d, as favored by Russia, some delegates suggested.

But not all countries may be on board, with some preferring a smaller reduction of 500,000 b/d, and the final deal remains in flux.

That would come on top of the 100,000 b/d cut for October that the OPEC+ agreed on Sept. 5.