Top 10 countries with the largest budget surplus

Key highlights

• The top 10 countries with the largest budget surplus as a percentage of GDP include Norway, Libya, and the UAE, among others.
• Nations like Iraq and Azerbaijan showcase the importance of economic diversification, steering away from heavy reliance on oil revenues.
• Effective management of natural resources is seen in countries like The Republic of Congo and Equatorial Guinea.

As India awaits the unveiling of its Union Budget 2024, we look at a pivotal element — Budget Surplus. A budget surplus occurs when a government’s income or revenues exceed its expenditures within a specified period, typically a fiscal year, indicating that the government is earning more than it is spending. It is generally put into relative terms, as a percentage of the nation’s Gross Domestic Product (GDP).

In this uncertain global environment, there are certain countries that have distinguished themselves by navigating fiscal challenges with notable prudence and resilience. They have maintained budget surpluses with their sound financial management and strategic economic policies.

Here, we delve into the top 10 countries that have consistently demonstrated the capacity to generate budget surpluses in an ever-changing global landscape.

Norway

Norway, a Scandinavian nation, is known for maintaining budget surpluses, largely due to its effective management of oil revenues through its Government Pension Fund Global (GPFG). The country’s fiscal policy and management of its resource wealth have contributed to its economic stability and budget surpluses in the past. The country recorded a budget surplus equal to 26.04% of its GDP in 2022.

Libya

Despite internal conflicts, Libya managed to achieve a budget surplus of 13.8% of its GDP in the year 2022, primarily due to its oil-rich reserves. After the gradual stabilization of the political situation, the country has increased its oil production and exports, which has contributed significantly to government revenues.

Iraq

Iraq is another oil-dependent nation with a budget surplus of 11.68% in 2022. Recent economic reforms aimed at diversification and reducing dependence on oil revenues have played a pivotal role in Iraq's fiscal success.

According to data from the International Monetary Fund (IMF), Iraq’s government budget averaged -3.24% of GDP from 2004 until 2022, reaching an all-time high of 10.70% of GDP in 2006 and a record low of -35.40% of GDP in 2004.

Qatar

Qatar, another Gulf country, also benefits from substantial revenues from oil and gas and tourism, contributing to budget surpluses. The country’s budget surplus accounted to 10.32% of GDP in 2022.

United Arab Emirates (UAE)

United Arab Emirates (UAE) is synonymous with economic prosperity in the Gulf region. It has strategically invested its oil and gas revenues in infrastructure, tourism, and diversifying industries. It maintained a budget surplus of 9.89% of GDP in 2022.

The Republic of Congo

The African country, The Republic of Congo, achieved a budget surplus of 6.5% in 2022 through prudent management of its natural resources, including oil. The country’s commitment to responsible resource management has allowed it to maintain fiscal discipline and economic stability, despite facing political instability.

Azerbaijan

Azerbaijan witnessed economic growth driven by its energy sector, particularly oil and gas exports. Its impetus on infrastructure development and economic diversification has contributed to sustained budget surpluses of 5.97% of GDP in 2022.

Samoa

Samoa, a small island nation in the Pacific, achieved a budget surplus of 5.35% of GDP in 2022 through effective fiscal management and international aid. Its prudent use of financial resources has led to economic stability.

Equatorial Guinea

Situated in Central Africa, Equatorial Guinea has leveraged its oil wealth to achieve a budget surplus of 4.8% in 2022. Petroleum accounts for most of the country’s exports and contributes more than four-fifths of its GDP.

Palestine

Palestine saw a budget surplus of 3.6% in 2022, as per the available data. Its diversification of the economy and investment in key sectors have contributed to fiscal stability. However, ongoing geopolitical issues remain essential to be watched out for.

Conclusion

These were the top 10 countries with significant budget surpluses that exemplify resilient fiscal management amidst global uncertainties. From Norway's effective oil revenue management to the diversification efforts of nations like Iraq and the strategic investments of the UAE, these countries highlight the crucial role of judicious economic policies in establishing and maintaining fiscal resilience.