Saudi Arabia

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

The economy of Saudi Arabia is entirely oil based. The country has the largest oil reserves in the world and is also the world's largest oil producer and exporter. Oil accounts for more than 90% of the country's exports and nearly 75% of the government revenues. Driven by strong government spending, rising foreign investment, increasing oil production and high oil prices; the country's economic growth will remain robust in the coming years. The real GDP growth rate was 3.5% in 2007 and is estimated to remain between 5-7% a year during 2008-12. The rising cost of living will be a source of discontent, along with unemployment and perceived corruption. Inflation was 4.1% in 2007, reached a record level of 10.5% in April'2008 and is expected to average at around 11% during 2008-09.

The government wants to reduce the kingdom's dependence on the oil sector by diversifying its economic activity through privatization, focusing particularly on manufacturing and agricultural sectors. The manufacturing sector contributes only 10% to the GDP. Private investments are supported by generous government financing and incentive programs. The unemployment rate in the country is estimated at around 12%. The agricultural sector is widely subsidized and accounts for 10% of the country's GDP (non-petroleum). Tourism generates huge revenues (nearly 4 million tourists per year), thanks particularly to Mecca.

After becoming a member of WTO in December 2005, it has increased market access to foreign goods and services. The share of the foreign trade in Saudi GDP is nearly 87%.

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	250.67	315.76	349.14	374.46e	407.03e
GDP (constant prices, annual % change)	5.3	6.1	4.3	4.1e	4.3e
GDP per capita (USD)	11,126.52	13,657.95	14,733.46e	15,416.48e	16,348.93e
Inflation rate (%)	0.4	0.7	2.2	3.0e	3.0e
Unemployment rate (% of the labor force)	n.c.	n.c.	6.3	n.c.	n.c.
Current Account (billions USD)	52.00	90.11	95.51	83.12e	81.81e
Current Account (in % of GDP)	20.7	28.5	27.4	22.2e	20.1e

Source: IMF - World Economic Outlook Database; ILO, Laborstat - Yearly Statistics

Note: (e) Estimated data

Socio-demographic indicators	2006
Unemployment rate (%)	6.3

Source:

Main sectors of industry

The Oil and Gas Sector, manufacturing, building and construction, banking, water desalination, insurance.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	1.8	6.2	4.7
Value added (in % of GDP)	4.0	58.9	37.1
Employment by sector (in % of total employment)	4.7	21.0	74.2

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	3.75	3.75	3.75	3.75	3.75

Source: World Bank - World Development Indicators

Foreign trade in figures

After becoming a member of WTO in December 2005, Saudi Arabia has increased market access to foreign goods and services. The share of the foreign trade in Saudi GDP is nearly 87%. Kingdom's top three export partners are: the U.S.A. , Japan and South Korea . The country mainly exports crude oil, plastics and organic chemicals. The top three import partners are: the U.S.A, Japan and Germany . Saudi Arabia mainly imports vehicles, machinery, electrical equipment, iron & steel, and food products. Saudi Arabia is the world's largest barley importer.

In order to promote international trade, attract foreign investment and diversify to non-oil sectors, the government has announced plans to establish six "economic cities" in different regions of the country.

Foreign trade indicators	2002	2003	2004	2005
Imports of goods (millions USD)	29,624	33,868	41,050	51,327
Exports of goods (millions USD)	72,464	93,244	125,998	174,635
Imports of services (millions USD)	19,980	20,857	25,696	27,947
Exports of services (millions USD)	5,177	5,713	5,852	5,916
Imports of goods and services (annual % change)	0.8	11.5	n.c.	n.c.
Exports of goods and services (annual % change)	-7.2	20.0	n.c.	n.c.
Imports of goods and services (in % of GDP)	23.8	24.1	24.9	26.4
Exports of goods and services (in % of GDP)	41.2	46.1	52.7	60.7
Trade Balance (millions USD)	42,840	59,376	84,947	123,308
Trade Balance (including service) (millions USD)	28,037	44,232	65,103	101,277
Current Account (millions USD)	11,873	28,048	51,926	87,131
Current Account (in % of GDP)	6.3	13.1	20.7	28.1
Foreign trade (in % of GDP)	65.0	70.2	77.5	87.1

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
Japan	27.5%
United States	15.3%

Main suppliers (% of imports)	2006
United States	14.5%
China	8.6%
Germany	8.1%
Japan	8.1%
Italy	4.0%

Source: 2006

Main products

Main exports (% of exports)	2006
Mineral fuels, mineral oils	89.5%
Plastics	2.4%
Organic chemicals	2.3%
Vehicles other than railway or tramway	0.5%
Electrical machinery and equipment	0.4%

Main imports (% of imports)	2006
Machinery and mechanical appliances	16.6%
Vehicles other than railway or tramway	15.1%
Electrical machinery and equipment	9.1%
Articles of iron or steel	5.5%
Iron and steel	4.5%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: Ministry of Finance Ministry of Economy and Planning Ministry of Petroleum and Mineral Resources Ministry of Commerce and Industry Ministry of Agriculture and Water
Statistical Office: Central Department of Statistics and Information
Central Bank: The Saudi Arabian Monetary Agency (SAMA)
Stock Exchange: Saudi Stock Exchange (Tadawul)
Online newspapers: List of Saudi Newspapers
List of Arabic newspapers
Search Engines: Saudi info
Saudisearch
Saudi on line
Economic portals: Economy watch

Political outline

Executive Power: King is both the chief of the state and head of the government. The monarch is hereditary. Council of Ministers (cabinet) is appointed by the monarch and includes many royal family members. The Council of Ministers has both legislative and executive powers, subject to King's approval.
Legislative Power: There is no elected legislature in Saudi Arabia. A Consultative Council was appointed in August 1993 which has 120 members and a chairman appointed by the King for four-year terms. This Council has limited powers and does not affect decision making or power structures in a meaningful way. The people of Saudi Arabia enjoy very limited political rights, almost equal to nothing.
Main political parties: No political parties are allowed in Saudi Arabia. However, a party called Green Party of Saudi Arabia, which promotes the values of the worldwide Green movement, exists as an illegal organization. The first Saudi Arabian municipal elections were held in the year 2005.
Current political leaders: King and Prime Minister: ABDALLAH bin Abd al-Aziz Al Saud (since August 2005) - hereditary.
Heir Apparent: Crown Prince SULTAN bin Abd al- Aziz Al Saud - half brother of the King.
Next election dates: Not Applicable