Saudi Arabia: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
The economy of Saudi Arabia is entirely based on oil. The policy of large-scale public works undertaken by the government, as well as foreign direct investment and the soundness of the banking and financial system have enabled the country to become the number one regional economy and one of the largest in the world. After the global economic recession of 2008-2009, the recovery in domestic demand in 2010 helped stabilize growth; this was consolidated in 2011 (6%).
The government's priority is to maintain growth and living standards, and create jobs in an uncertain global and regional environment marked by social unrest. The government is developing the oil and gas industry while seeking to reduce dependency of the kingdom on oil, diversifying its economic activities and developing mainly agriculture (notably through the purchase of land abroad to cultivate certain essential goods), food and industry. The private sector development is encouraged (especially in services), but in terms of the wave of social unrest which has recently swept through the region, social spending has been increased and jobs have been created in the public sector.
The standard of living is one of the highest in the region with over USD 20,000 GDP/inhabitant. The country is still marked by an unemployment rate of about 11% and high degree of social inequality.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 377.20e | 448.36 | 560.29 | 581.94 | 620.86 |
| GDP (Constant Prices, Annual % Change) | 0.1 | 4.1 | 6.5 | 3.6 | 4.4 |
| GDP per Capita (USD) | 14,148 | 16,267 | 19,890 | 20,214 | 21,101 |
| General Government Gross Debt (in % of GDP) | 15.9e | 9.9e | 7.1e | 6.1 | 5.1 |
| Inflation Rate (%) | 5.1e | 5.4e | 5.4e | 5.3 | 4.3 |
| Unemployment Rate (% of the Labor Force) | 10.5 | 10.0 | - | - | - |
| Current Account (billions USD) | 20.98 | 66.84 | 115.31e | 82.59 | 73.12 |
| Current Account (in % of GDP) | 5.6e | 14.9 | 20.6 | 11.8 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
Agriculture accounts for 3% of the GDP and employs 15% of the active population. It is not a very productive sector despite the huge state investments. Saudi Arabia imports most of its agricultural and food product requirements because of the geographical and climatic contraints (droughts). Water scarcity is a serious regional problem that the country is likely to face in the coming years, as growing cultivation of wheat presents a strong threat of water depletion.
The industrial sector represents two thirds of the GDP. It is dominated by non-manufacturing activities (oil drilling). The country has the largest oil reserves in the world and is also the largest producer and exporter of oil in the world. Oil accounts for more than 90% of exports and nearly 80% of government revenues. The share of non-oil industrial sector is now growing because of the investments of the Saudi state for economic diversification.
Lastly, services represent 22% of the GDP. This sector is mainly dominated by tourism, financial and insurance services and the banking sector. Tourism generates very large revenues (almost 4 milions of tourists per year), exclusively thanks to the pilgrimage to Mecca.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 4.8 | 18.0 | 77.2 |
| Value Added (in % of GDP) | 2.6 | 62.0 | 35.5 |
| Value Added (Annual % Change) | 1.1 | 3.1 | 4.6 |
Source: World Bank - Last Available Data.
| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Saudi Riyal (SAR) - Average Annual Exchange Rate For 1 USD | 3.75 | 3.75 | 3.75 | 3.75 | 3.75 |
Source: World Bank - Last Available Data.
Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
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The foreign trade share in Saudi Arabia is nearly 95% of the GDP (average 2008-2010). The country's trade balance, although structurally in surplus, fluctuates according to the price of oil and the global demand.
Saudi Arabia's main export partners are the United States, China and Japan, followed by Germany and U.A.E., as well as the Southeast Asian countries. The country exports mainly crude oil (the black gold represents 90% of its exports), plastics, organic products and chemicals.
Its main import partners are the United States, Japan, China and Korea, followed by other Asian countries (India, Taiwan, Singapore). Saudi Arabia mainly imports vehicles, machinery, electrical equipment, iron, steel and food products.
In order to promote international trade, attract foreign investment and diversify the non-oil sectors, the government has announced plans to establish four "economic cities" in different regions of the country.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 90,214 | 115,134 | 95,552 | 102,000 | 111,744 |
| Exports of Goods (million USD) | 233,329 | 313,462 | 192,314 | 254,000 | 364,500 |
| Imports of Services (million USD) | 45,914 | 49,572 | 47,039 | 50,996 | 54,876 |
| Exports of Services (million USD) | 15,743 | 9,128 | 9,428 | 10,346 | 12,142 |
| Imports of Goods and Services (Annual % Change) | 21.6 | - | - | - | - |
| Exports of Goods and Services (Annual % Change) | 3.0 | - | - | - | - |
| Imports of Goods and Services (in % of GDP) | 37.7 | 37.1 | 43.1 | 35.4 | - |
| Exports of Goods and Services (in % of GDP) | 64.8 | 67.8 | 54.2 | 56.8 | - |
| Trade Balance (million USD) | 150,716 | 212,025 | 105,230 | 153,717 | - |
| Trade Balance (Including Service) (million USD) | 104,026 | 146,161 | 39,988 | 87,628 | - |
| Foreign Trade (in % of GDP) | 102.5 | 104.9 | 97.3 | 92.2 | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2007 |
| Japan | 26.8% |
| United States | 17.5% |
| United Arab Emirates | 3.6% |
| Netherlands | 1.6% |
| India | 1.4% |
| See More Countries | 49.1% |
| Main Suppliers (% of Imports) |
2007 |
| United States | 13.6% |
| China | 9.7% |
| Germany | 8.9% |
| Japan | 8.7% |
| Italy | 4.5% |
| See More Countries | 54.6% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
Map of freedom 2010
Source: Freedom House
Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: May 2012