Saudi Arabia’s Finance Ministry has approved 659 projects valued at SR21bn ($5.6bn) during the first quarter of this year, the bulk of which comprise construction projects for roads, schools and wastewater facilities.

These include 479 development projects at a cost of SR15.7bn, schools and educational facilities amounting to SR4.7bn, 88 wastewater contracts worth SR3.6bn, 16 hospitals and health utilities projects valued at SR541m, as well as 48 contracts for SR2.8bn of other projects.

The kingdom is investing $400bn over a five-year period to 2013 in order to upgrade its infrastructure.

Saudi Arabia may end up spending 12 per cent above the SR540bn it budgeted for this year, but it could also achieve revenues 48 per cent higher than the planned SR385bn, if oil prices remain relatively buoyant, according to Said al-Shaikh, chief economist at National Commercial Bank.

Al-Shaikh predicts the kingdom will book a SR91bn surplus this year based on an average oil price of $75 per barrel, and will avoid a deficit if prices stay above $60.

“Crude oil prices, based on a modest recovery in global demand, are expected to average $75 [per barrel] with Saudi production rising to 8.3 million barrels per day,” Al-Shaikh told a conference in Saudi on 20 April.     

The government has forecast a SR70bn deficit this year based on a conservative price of $46 per barrel for oil.