The performance was mainly the result of two factors, a sharp decline in the outflow of services and a smaller than expected fall in exports. ‘I would guess that three things contributed to the services fall,’ says Said al-Sheikh, chief economist at Jeddah-based The National Commercial Bank. ‘They are a lack of scheduled payments for military procurement, a fall in Saudi travel outside the kingdom after 11 September, and a decrease in contract awards as the economy was disrupted by political tension in the last quarter of the year.’ Services payments in 2001 fell by 24 per cent to $19,307 million year-on-year.

However, the increased surplus was also due to better oil exports than had been expected. ‘I was surprised by the strong trade balance,’ says Al-Sheikh. ‘It was much higher than the initial estimate and suggests that the oil situation wasn’t as bad as we thought. I was expecting the trade balance to be about $4,000 million less than it was.’

Oil prices fell by about 20 per cent over the final quarter of 2001, which, combined with a lower OPEC production quota, led economists to revise their forecasts for oil exports. The figures suggest that exports over the first nine months of the year were better, and the last-quarter price fall less acute, than was thought at the time.