KSA holds GCC’s largest SWF assets at $641 bn



Saudi Arabia has ranked first in the volume of assets of sovereign wealth funds (SWFs) among the GCC countries at $641 billion (SR2,400 billion) followed by the United Arab Emirates (UAE) at $397 billion (SR1,489 billion).
Kuwait came in the third rank at $395 billion (SR 1,481 billion), followed by Qatar ($175 billion or SR656 billion), Oman ($14 billion or SR52.5 billion), and Bahrain ($11 billion or SR 41 billion), local media said quoting a report by Moody’s Investors Service.
The assets of SWFs in the GCC countries have grown alongside the recovery in oil prices since the 2009, the report said.
According to the Moody’s estimates, GCC SWFs reached an aggregate $1.6trillion (SR6 trillion) in assets at the end of 2012 (equivalent to 107 percent of the aggregate GDP), up from $1.0 trillion (SR3.75 trillion) in 2007 (105 percent of GDP).
The report said high oil prices in the last two years have led to an unprecedented accumulation of wealth in the GCC countries.
The GCC governments have recently ramped up their budget spending by engaging in ambitious infrastructure plans and by increasing state handout packages, the report said.
The high level of foreign-exchange reserves, which governments could liquidate to absorb a shock (e.g. oil prices and the real-estate and banking crisis), constitutes a significant buffer for public finances, the report said.
Referring to oil revenuers, the report said the average prices stood at $110 (SR412) per barrel in the last two years, which, it said, registered a historic record and surpassed the double of oil prices prevailing between 2001-10 at $55 (SR206) per barrel.
Oil production in the GCC countries captured 24.3 percent of the global oil production and 11 percent of the world’s gas production, the report said. As demand grew in the emerging markets, the GCC countries opted to raise production by 15.9 percent between 2010-12, the report said.
In an earlier report, Moody’s said the vulnerability of GCC government finances to a sudden fall in oil prices is mitigated by their massive SWF assets.
GCC sovereign funds account for 32.6 percent of the global SWF assets valued at $5.2 trillion (SR19.5 trillion), it said.


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