Saudi Oil Minister’s comments point to higher spending in 2012

Comments earlier this week from Saudi Arabia’s Oil Minister Ali Al-Naimi indicating that the government is comfortable with a crude oil price of $100pb (up from $70-80 previously) suggests that public spending could exceeds current plans in 2012. Of course, this is not surprising – government expenditure is generally higher than initial plans in Saudi Arabia. However, against the backdrop of last year’s enormous stimulus, a substantial rise in spending this year will increase pressure on public finances in the medium term.