Middle East countries are expected to gain up to $1.3 trillion in the next four years from additional oil revenues, said Jihad Azour, International Monetary Fund director for the Middle East and North Africa.
The gains, due to high oil prices, will provide ‘firepower’ to the region’s sovereign wealth funds (SWFs), Azour was quoted as saying in a Financial Times report.
Most of the oil-rich countries in the region have established large SWFs and use them to invest oil revenues in various sectors both within the countries and abroad. Saudi Public Investment Fund, the Qatar Investment Authority, Abu Dhabi Investment Authority, Mubadala, and ADQ are some of these funds.
Recently, Saudi Arabia said it achieved a rare budget surplus of over $20 billion in the second quarter of 2022, as oil revenues surged 90 percent compared to a year ago.
The surplus is largely due to oil revenues rising to more than 250 billion riyals, compared to around 132 billion during the same period in 2021, a jump of 89 percent.
Saudi’s PIF has invested over $620 billion in total, $7.5 billion alone in US stocks during the second quarter, when the share prices were relatively low.
Azour said that the Gulf nations must use the gains to invest in technology. “It’s an important moment for them to…accelerate in sectors like technology [domestically] as this is something that will allow them to increase productivity,” he told FT.