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GDP
2024: GDP contraction for third consecutive quarter
According to the results of the first quarter of 2024, the Saudi economy contracted for the third quarter in a row.
2023
Sixteenth in the world in GDP by PPP
Reduction in oil production led to a decrease in GDP by 1.1%
Saudi Arabia's GDP contracted 1.1% in 2023 after oil production contracted, according to estimates. The economy is heavily dependent on the oil sector for growth and revenue.
In January 2024, the IMF announced that Saudi Arabia was equal to Argentina in the list of lagging G20 countries.
GDP contraction of 4.5% in Q3 as oil sector falls
Saudi Arabia's economy has shrunk the most since 2020 as oil production slashed. The government says it is increasingly focusing on non-oil-related economic growth.
GDP in the third quarter of 2023 contracted by 4.5% compared to a year earlier, which was due to the fall in the oil sector of the economy by 17%, according to preliminary data from the General Statistical Office. Growth has slowed in non-resource sectors of the economy.
Q2 Growth Rate Cut
In the second quarter of 2023, the growth rate of the Saudi economy slowed down due to a decrease in oil production and a fall in prices for this product.
1% fall forecast
2022
GDP growth of 8.7% is the highest in the world among large economies amid the conflict in Ukraine
The overall growth of the economy Saudi Arabia in 2022 was 8.7%, according to Saudi Arabia estimates - the fastest in the world. This is more than twice the figure for 2021, when the economy expanded by 3.9%. The result was achieved thanks to the sanctions against, Russia introduced during the conflict on. To Ukraine
Saudi Arabia's non-oil economy, which is the engine of job creation, also helped the kingdom record the fastest overall growth among the world's largest economies in 2022.
It is noted that in 2022, the Saudi economy demonstrated the highest growth rates among the G20 countries. The recorded indicator exceeded the expectations of international analysts, who said an increase GDP states of 8.3%. Moreover, the 8.7% growth in the economy is the highest result for Saudi Arabia in a decade.
The policy adopted by the country's authorities to support the national economy contributed to the diversification of sources and created favorable conditions for achieving GDP growth in all directions. The large-scale initiative includes economic and financial reforms, various investment projects, etc. It is noted that in 2022, Saudi Arabia's GDP at current prices crossed the $1 trillion mark for the first time in history.
The GASTAT report says that at the end of 2022, the segment of crude oil and natural gas recorded GDP growth at 16.1% - a record high. This is followed by the sphere of transport and communications with an increase of 9.1%. In the oil refining segment, an increase of 8.3% was achieved on an annualized basis. The production sector showed a positive trend of 7.7%. GDP growth in the segment of wholesale and retail trade, restaurant and hotel business - 5.1%. In the field of finance and insurance in 2022, an increase of 4.9% was noted, in the direction of construction - 4.5%. Public services showed an increase of 2.6%, housing and communal services (electricity, gas and water) - 2.2%. In other areas, positive dynamics was also recorded.[1]
Saudi Arabia's share of global PPP GDP exceeds 1.2%
Main article: World Economy
GDP estimate - $1.0 trillion
12.2% growth in Q2
Saudi Arabia's economy grew 12.2% in the second quarter of 2022, the highest quarterly growth in more than a decade. The increase is directly related to the rise in oil prices after the start of Russia's special operation in Ukraine.
GDP forecast - $1.0 trillion
2021: GDP size - $0.84 trillion
2020: Saudi Arabia's GDP rises 300% in 20 years
Financial system
Non-financial debt
2022: Aggregate non-financial debt
International reserves
2023
US Treasury portfolio increase to $132 billion
Saudi Arabia increased its holdings of US Treasuries by almost $4 billion by the end of 2023, bringing the volume to its highest level since the beginning of 2021.
The amount was nearly $132 billion in December, according to the latest Treasury data.
Other major holders of U.S. government debt, including China and Germany, have also increased stocks of the risky asset, perhaps taking advantage of attractive returns.
Early, at the end of June 2023, US Treasury stocks in Saudi Arabia fell to their lowest level in more than six years.
Down to $407 billion
Saudi Arabia's foreign exchange reserves in July 2023 fell by more than $16 billion to a low of 2009, the sharpest decline since oil prices turned negative during the COVID-19 pandemic, and the kingdom used its savings to invest in US stocks.
$410 billion - minimum since 2010
Saudi Arabia's net reserves fell to $410 billion by May 2023, the lowest since 2010. This is an obvious sign that the kingdom has not yet used last year's $326 billion in oil revenues to replenish the Central Bank.
Sovereign Wealth Fund
Main article: PIF (Saudi Sovereign Wealth Fund)
Current account
2023: Decrease in current account in Q1
Budget
2023: Deficit in the first quarter $770 million
Saudi Arabia reported a budget deficit of $770 million in the first quarter of 2023, as oil revenues fell 3% due to lower prices.
2022: Government spending tops $300 billion
2020
VAT increase from 5% to 15%
In Saudi Arabia, from July 1, 2020, the value added tax (VAT) rate increased from 5 to 15%.
The increase occurred on the basis of the royal decree of May 11, 2020 on amending the law on the VAT collection system. The decree applies to all goods and services in the commercial market of KSA.
As a result of the change in the VAT rate, the state-owned Saudi oil and gas company Saudi Aramco announced an increase in domestic gasoline prices since Wednesday. Since July 1, the cost of one liter of automotive fuel is AI-91 0.98 Saudi riyals (1SAR/0.27USD), the price of AI-95 is 1.18 riyals per liter.
State finance crisis amid oil price crash during COVID-19 pandemic
Oil wars with falling prices to the levels of the 1990s and the COVID-19 coronavirus pandemic brought Saudi Arabia to the crisis of state finance.
At the end of March 2020, the kingdom's gold and foreign exchange reserves decreased by $27 billion - a record value for 20 years of available statistics, and their total volume shrank to $464 billion - the lowest since 2011.
A third of the amount spent was used by the government, using the current account in the Central Bank, another third was spent on injecting currency into the banking system, the balance was used to compensate for the outflow of capital. The Saudi Central Bank sells reserves in the market, maintaining a fixed rate of the national currency - riyal - at 3.76 riyal per dollar.
To cover the budget deficit, which is 90% filled with oil revenues, Riyadh twice entered the international capital market this year, placing Eurobonds for $19 billion.
Starting in the summer, the Ministry of Finance of the Kingdom launches a program to optimize state finance for $100 billion riyals. It will include a 3-fold increase in VAT - from 5% to 15% - and the abolition of payments of the subsistence minimum.
In addition, a reduction in capital spending is planned for fiscal 2020 (1441-42 according to the Muslim calendar), including the Vision-2030 program - Crown Prince Mohammed bin Salman's ambitious plan to overhaul the Saudi economy with its departure from oil dependence.
2018: Military budget 8.8% of GDP
Military budget in% of GDP, 2018:
- 8.8% Saudi Arabia
- 4.3% Israel
- 3.9% Russia
- 3.2% United States
- 2.5% Turkey
- 2.4% India
- 2.3% France
- 1.9% Australia
- 1.9% China
- 1.8% United Kingdom
- 1.3% Canada
- 1.2% Germany
(SIPRI)
Minerals
Oil and gas production
Main article: Oil and gas production in Saudi Arabia
2024: Raising the valuation of the country's mineral resources from $1.3 trillion to $2.5 trillion
In January 2024, Saudi Arabia revised upward the estimate of its pristine mineral resources, including phosphates, gold and rare earth metals, to $2.5 trillion from the 2016 forecast of $1.3 trillion, the country's mining minister said.
The mining industry is a key part of Riyadh's efforts to create an economy that will not depend largely on oil, suggesting a move to develop huge reserves of phosphate, gold, copper and bauxite.
Power
2020: Energy consumption per capita
and
Foreign trade
2023: 4-fold increase in imports from China since 2008
2022
G7 countries are the main export destination
China is the largest export destination
Lion's share of exports - oil
Trade with China is bigger than with the US and EU combined
Trade China and Saudi Arabia exceeded Saudi trade with and USA the EU combined. Economic ties between the PRC and Saudi Arabia continue to strengthen after the leaders of the countries sign cooperation agreements.
Trade between China and Saudi Arabia countries grew by 32.9% on an annualized basis and exceeded $116 billion in 2022, the PRC has remained the largest trading partner of Saudi Arabia for many years.
2021
Incomes of the population
2023: Minimum wage - $958
Information Technology
Data centers
Main Article: Data Centers (Saudi Market)
2024: Saudi Arabia 'sat on a heap of yuan' from oil sales, demands China invest in IT
On February 19, 2024, it became known that the authorities are Saudi Arabia demanding that leading Chinese technology companies invest in the country in exchange for the opportunity to conclude large deals. In particular, Alibaba SenseTime they entered into hundreds of millions dollars of deals with Saudi Arabia with tough conditions, including the creation of joint ventures.
Riyadh is imposing increasingly stringent demands in deals with Chinese companies, the Financial Times reported. So, in some cases, enterprises from the PRC have to transfer their technological developments to the Saudi side, train local specialists or finance other projects in the country.
The publication notes that Saudi Arabia uses its oil revenues to stimulate the domestic technology industry. It is assumed that this will modernize the economy of the kingdom. The strategy being implemented coincided with the funding crisis and weak sales of Chinese technology companies in the PRC market.
 | There is a hidden motivation to expand investment relations between China and Saudi Arabia. The kingdom sits on a large pile of yuan from the sale of oil in the PRC, but the use of these funds is limited. One option is to buy Chinese goods and services, says Chris Vassallo, a researcher at the Asia Policy Institute. |  |
Chinese firm SenseTime, which develops artificial intelligence-based systems for facial recognition, was awarded a contract as part of the Neom futuristic project, which provides for the development of territory in the far northwest of Saudi Arabia. It aims to transform the state into a country of the 21st century and get rid of oil dependence. At the same time, Alibaba Cloud entered the Saudi market in 2022 through a joint venture with Saudi Telecom Group, which also collaborated with Huawei on 5G. Saudi Arabia is actively attracting foreign technology companies to develop its nascent artificial intelligence industry. At the same time, China is the largest buyer of Saudi oil.[2]
Infrastructure
2021: $147 billion infrastructure investment plan over 9 years
In July 2021, it became known that Saudi Arabia plans to invest 550 billion riyals (147 billion dollars US) in transport and logistics over the next nine years, as Crown Prince Mohammed bin Salman seeks to turn the kingdom into a global aviation hub.
Saudi officials want to turn the capital Riyadh into a global business hub, attract more foreign talent and welcome 100 million tourists annually by 2030.
At the heart of the strategy is a plan by a sovereign state investment fund to create a new international airline with a hub in Riyadh.
Other details of the new strategy include: a "significant expansion" of airport infrastructure in Jeddah and Riyadh, advancing plans to build a train linking Jeddah to Riyadh and the east coast, and exploring the use of futuristic technologies such as Hyperloop and the new generation of Maglev.
R&D
2020: R&D spending - $12.5 billion
Agriculture
2021: Share of farmland from the country's area - 81%
2019: Average use of pesticides in agriculture
Tourism
2023
Growth of tourist flow of Russians doubled to 106 thousand visits
In 2023, tourists from Russia visited Saudi Arabia 106 thousand times - this is twice as much as in 2022, when the number of such trips was 55 thousand. This was announced in March 2024 by RBC with reference to the director of the tourism department of Saudi Arabia Fahd Hamiddadin.
Russian tourists visit Saudi Arabia with two main goals. First, it is a religious pilgrimage to Mecca. The second is recreational tourism for the purpose of recreation. Fahd Hamiddadin especially noted the increase in the flow of tourists who came for the purpose of recreation.
In general, the tourist flow to Saudi Arabia, according to the World Tourism Organization (UNWTO), increased by 12% and amounted to 106.2 million foreign tourists. Saudi Arabia has become the fastest growing number of tourists among the G20 countries.
According to Russian tour operators, there is a "colossal" increase in demand for travel to Saudi Arabia. Popular routes include Riyadh and the city of Jeddah.
| | The main flow of tourists is aimed at excursion tours, people want to get acquainted with local traditions, immerse themselves in the culture of the Middle East. But, of course, some of the tourists are pilgrims, - they say in the company Tez Tour (quote from RBC). | |
Saudi Arabia reached its plan for the number of tourists seven years ahead of schedule. Until 2016, the country was one of the most closed in the world, it was possible to get there only on business issues or for pilgrimage to Mecca and Medina. The change in the country's attitude towards tourism came after the Vision 2030 plan presented by Crown Prince Mohammed ibn Salman. In this regard, tourism is noted as one of the important areas of economic diversification for moving away from dependence on oil revenues.
The first tourist visas appeared in Saudi Arabia in 2019. Then visas began to be issued for citizens of 49 countries, including Russia. By 2030, the country plans to increase the flow of tourists to 150 million people a year. The country is actively developing resorts on the shores of the Red Sea, as well as projects of "cities of the future" called Neom. The project is planned to be completed by 2025.[3]
Introduction of instant electronic visas
In mid-June 2023, Saudi Arabia announced the introduction of an instant electronic visa system as part of efforts to develop the tourism industry in order to diversify the economy.
The instant e-visa system, available on the official www.mofa.gov.sa website, is designed to simplify and speed up the visa process, making it easier for travelers from around the world to get acquainted with what the kingdom has to offer.
According to the Saudi government, holders of British, American and Schengen visas, as well as permanent residents of these and any other EU countries, can now easily obtain a tourist electronic visa to Saudi Arabia.
According to the BBC, the state authorities have set themselves a goal that includes attracting 100 million visitors a year by 2030. The kingdom seeks to entice experienced travellers from these key regions by removing bureaucratic obstacles. This latest decision marks a significant step towards the gradual digitalization and integration of technology into the state's tourism sector with the aim of providing travelers with an easy way to travel in Saudi Arabia. The Saudi Tourism Authority intends to speed up the process of simplifying access routes so that as many travel enthusiasts from around the world as possible can enjoy what this country has prepared for them.
Saudi Arabia has also opened the country's digital platform for religious tourism, called Nusuk. The platform provides opportunities for both pilgrims and visitors, serving as a portal for those who plan sacred journeys to the country's revered places - Mecca and Medina.
Since 2019, Saudi Arabia has seen significant growth in the tourism sector, positioning itself as one of the fastest growing markets in the world. In 2022 alone, 93.5 million people visited the country.[4]
2018
Consumption
2024: Permission to sell alcohol only to foreign diplomats
In January 2024, Saudi Arabia for the first time allowed the sale of alcohol - but only to foreign diplomats. Riyadh breaks with tradition and opens a outlet in the capital that will serve exclusively non-Muslim foreign officials.
2023: Poultry meat is the most consumed type of meat
2018: Sale of alcoholic beverages prohibited
See also
Notes
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