SAUDI: The Q3 fiscal surplus means the 2021 outturn should nearly balance, and we expect a 2%+ surplus in 2022

GULF COUNTRIES - Forecast 03 Nov 2021 by Justin Alexander

* The 0.9% of GDP surplus in Q3 was only the second on record in the quarterly series.
* VAT revenue beat our expectations, and oil was in line, given higher prices and production.
* Spending dipped in Q3 but is still likely to come in a little above budget.
* We have halved our deficit forecast for 2021 to -0.5% of GDP in our core scenario, which assumes oil stays around $84 for the rest of the year.
* If oil averages $70 in 2022 and OPEC+ proceeds as planned, the surplus could be 2-4% of GDP. A fiscal breakeven could even be possible with oil as low as $50.
* This report includes a spreadsheet of Saudi fiscal data, also including our forecasts for Q4 and 2022.

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