(Bloomberg) -- Saudi Arabia's net foreign assets rose slightly in July even as crude prices lingering below $50 a barrel kept the coffers of the world's largest oil exporter under pressure.
The stockpile grew by 1.61 billion riyals ($429 million), a rise of around 0.1%, according to a monthly report from the Saudi Arabian Monetary Authority, the kingdom's central bank, on Sunday. Reserves in June had fallen to 1.66 trillion riyals, the lowest level since 2010.
Officials attributed a record cumulative decline of more than $47 billion in March and April to a $40 billion transfer from the central bank to the sovereign wealth fund, intended to support investments abroad to take advantage of market turmoil during the coronavirus pandemic.
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Saudi Arabia has suffered from a simultaneous decline in oil and non-oil revenue this year as the global pandemic combined with lower energy prices to jolt the kingdom's public finances. Officials have taken unprecedented measures in response, including tripling value-added tax.
The government could still face a budget deficit of over 13% of gross domestic product in 2020, according to the median of forecasts compiled by Bloomberg. Finance Minister Mohammed Al-Jadaan has said the kingdom will double its borrowing plans this year to soften the impact on the state's reserves, which it needs to maintain above a certain level to support the kingdom's currency peg to the dollar.
The new central bank data also showed that ATM withdrawals combined with electronic point-of-sales transactions -- a key indicator of consumer spending -- rose 3.8% annually in July, equivalent to a slight decline when adjusted for inflation.
The kingdom's higher value-added tax of 15% kicked in on July 1, driving annual inflation up to 6.1%, the fastest pace in years.
©2020 Bloomberg L.P.
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