CAIRO (AP) — Saudi Arabia's net foreign assets hit 1.8 trillion riyals ($480 billion) in May, their highest level ever, as surging oil prices helped the kingdom offset increased spending aimed at boosting growth and staving off the protests that have swept through other Arab nations. The gains in the kingdom's foreign asset position continued for at least the sixth consecutive month, climbing 2.5 percent from April levels of 1.756 trillion riyals, according to a report released by the Saudi Arabian Monetary Agency, the country's central bank. "It's a reflection of the high oil revenues," John Sfakianakis, chief economist at the Riyadh-based Banque Saudi-Fransi, said Thursday. "If oil prices stay at these levels, then Saudi Arabia will see its foreign assets climbing above the half a trillion (dollar) mark, which is significant." Unrest in the Arab world, including the civil war in OPEC member Libya, helped propel oil prices well above $100 per barrel for much of the past few months before the U.S. benchmark crude futures contract eased back to the low-to-mid $90s following the producer group's meeting earlier this month. The increase in Saudi Arabia's foreign assets came as the prices climbed and the kingdom, to offset lost Libyan production, ramped up its output. The additional money is key for the Gulf kingdom, which sits atop the world's largest proven reserves of conventional crude and was projecting a slight budget deficit because of ramped up spending this year. The increase in foreign assets, however, will more than offset that deficit, economists said. Saudi Arabia's budgetary break-even oil price is between $85-87 per barrel, said Sfakianakis. "Even with the additional spending they've announced on top of the budgetary spending, they'll have a comfortable surplus as long as oil prices stay above $90" per barrel, he said. Unrest sweeping across the Arab world led to the ousting of longtime leaders in Tunisia and Egypt, plunged Libya into civil war and left the presidents of Syria and Yemen battling to stay in power. Bahrain, the tiny Gulf monarchy that sits off Saudi Arabia's coast, is also embroiled in its own uprising. As the protests spread across the region, Saudi Arabia's king announced successive spending packages aimed at improving the lives of the country's lower-income brackets, boosting job growth and expanding the economy. In total, the packages ordered by King Abduallah will cost the country about $120 billion over several years, and the finance minister has said officials would fund the measures through oil revenues rather than dipping into their foreign assets. But the measures also come at a cost, with the country forecasting a slight deficit for the current fiscal year.
