With a total worth of $33.50 trillion, Saudi Arabia has the second most valuable natural resources in the world. In December 2011, days after the Arab Spring uprisings, the Saudi interior ministry detained reporter Feros Boqna and two colleagues (Hussam al-Drewesh and Khaled al-Rasheed) and held them for almost two weeks for questioning after they uploaded a 10-minute video on the topic (Mal3ob 3alena, or 'We are being cheated') to YouTube. [59], Since 2017, in order to boost the economy and decrease the country's dependency on oil, Mohammed bin Salman has brought in multiple changes, including the raising of prices of gasoline and electricity, introduction of new taxes, and policy of Saudi workers over foreign workers. Saudi Arabia is part of the following trade organizations: Among the challenges to Saudi economy include halting or reversing the decline in per capita income, improving education to prepare youth for the workforce and providing them with employment, diversifying the economy, stimulating the private sector and housing construction, diminishing corruption and inequality. Saudi Arabia signed 35 economic cooperation agreements with China worth a total of $28bn at a joint investment forum during the visit, according to Saudi Arabia… Read more. [87] Foreigners (being non-GCC nationals) are entitled to ownership and investment of in real estate with some conditions. With 189 member countries, staff from more than 170 countries, and offices in over 130 locations, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries. However, no firm plans for any tax have been unveiled. It also has the fifth-largest proven natural gas reserves[17] and is considered an "Energy Superpower". [167], On 16 November 2020, Saudi Aramco announced hiring banks to sell dollar-denominated bonds with the aim of improving finances after the coronavirus pandemic caused a sharp fall in the global demand for crude oil. [29] Mean wages were $14.74 per man-hour in 2009. [62], Saudi Arabia has announced plans to invest about $47 billion in three of the world's largest and most ambitious petrochemical projects. In 1988, Saudi Aramco was established to take over the responsibilities of Aramco. [172], The e-commerce market was estimated at just over $1 billion in 2001. Saudi Arabia's Economic Update, October 2019 [PDF], Environmental and Social Policies for Projects. Consumer spending was also restrained after a sharp increase in prices for energy, electricity and water earlier in 2018. Saudi Arabia is the largest economy in the Middle East and the wealthiest Arab country in the region. In 2008, SABIC was Asia's largest (in terms of market capitalization) and most profitable publicly listed non-oil company, the world's fourth-largest petrochemical company, ranked 186th as world's largest corporation on the Fortune Global 500 for 2009, the second largest producer of ethylene glycol and methanol in the world, the third largest producer of polyethylene and overall the fourth-largest producer of polypropylene and polyolefin. However, in 1981 the operations in this line was ceased as a new one was put into operation that linked between Jubail on the Persian Gulf and Yunbu on the Red Sea which highly contributed inc shortening the destination of oil transform. This was announced in August 2018 by the minister of Housing Mr. Majed Al-Hogail. In addition, since its formation, Ma'aden (through the Ministry of Petroleum and Mineral Resources) has collaborated with the government and local legislators to develop a regulatory framework for the governance of the mining industry. Moreover, the government has been seeking to achieve greater transparency by issuing a draft law regarding the involvement of private sector. source: World Bank. ", "The World's Largest Oil Reserves By Country", "World Natural Gas Reserves by Country (Trillion Cubic Feet)", "Kingdom of Saudi Arabia - Ministry of Commerce and Investment", "Saudi Arabia sees first budget surplus since 2014", "Report for Selected Countries and Subjects", "Aramco: How The World's Most Important Energy Company Works", "OPEC crude oil price statistics annually 1960-2018 | Statistic", "Facing new oil glut, Saudis avoid 1980s mistakes to halt price slide", GDP (PPP) per capita trend during 1980-2010, Saudi Arabian imports grew 14% during the 2000s, "A Statistical Analysis of OPEC Quota Violations", "Saudi Arabia Suffers Shock Collapse in Inward Investment", "Is Saudi Arabia Unable Or Just Unwilling To Stem The Flow of Money Leaving The Country? An extension of OPEC production cuts restrains the short-term growth prospects of Saudi Arabia’s still oil reliant economy. Standard & Poor's and Fitch Ratings claimed SABIC to be the world's largest producer of polymers and the Persian Gulf region's largest steel producer for 2005 and assigned SABIC an "A" corporate credit rating. The remaining oil exports are transported via the east–west pipeline across the kingdom to the Red Sea port of Yanbu. In 2016, Mohammad bin Salman announced Saudi Vision 2030, a plan to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism. A foreign company needs to have a foreign investment licence from the Saudi Arabian General Investment Authority ('SAGIA') and the owned real estate must be related to particular investment project for property development. [51] Saudi Arabia turned towards international debts following a decline in its oil income. [46] In the first quarter of 2018, net capital outflows were running at approximately 5% of GDP, compared to less than 2% of GDP in late 2016. From The Report: Saudi Arabia 2019 A welcome improvement was seen in the Kingdom’s economic fortunes in 2018, with GDP growth of 1.2% in the first quarter marking the first expansion of the national economy after five consecutive quarters of contraction. [34][35] Moreover, in 1951, Aramco started operating Trans-Arabian Pipeline that used to transform oil from the eastern region of Saudi Arabia to the Mediterranean Sea, passing by Jordan, Syria and Lebanon. The kingdom witnessed a mass departure of around 750,000 foreign workers after imposing new government levies on expat workers. Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). [169], The Saudi Arabian Basic Industries Corporation SABIC was established by a royal decree in 1976 to produce chemicals, polymers, and fertilizers. Welcome to KPMG Saudi Arabia’s first ever budget report for the Kingdom of Saudi Arabia (KSA). These adverse outcomes would be partially offset by the boost to non-oil private sector activity from rising government spending. The real estate sector has been driven recently by strong local demand fundamentals and only a small amount by speculation. [40] This created a worldwide oil glut, with the price of oil dropping from approximately $36 per barrel in 1980, to approximately $14 by 1986. In 1933, the Saudi government signed an oil concession agreement with Standard Oil Company of California. In almost two and a half years, bonds worth $60 billion have been sold by Saudi, becoming one of the biggest borrowers globally. [55], In the fourth plan (1985–90), the country's basic infrastructure was viewed as largely complete, but education and training remained areas of concern. These firms are "heavily dependent on government spending", which is dependent on oil revenues. It also continued the effort to "Saudiize" the labor force. Saudi Arabia has natural resources other than oil, including small mineral deposits of gold, silver, iron, copper, zinc, manganese, tungsten, lead, sulphur, phosphate, soapstone and feldspar. However, their effect on Saudi Arabia's economic fortunes has been small. [56] The fishing villages of al-Jubail on the Persian Gulf and Yanbu on the Red Sea were developed. [134] In the said report the annual inflation rate increased from only 0.5% (in June) to 6.1% (in July), before the increase of VAT to 15% from 5% was introduced, effective from 1 July 2020. On top of all this, the International Monetary Fund last month sharply cut Saudi Arabia's 2019 growth forecast to 0.2% from 1.9%, citing a decline in the … This page has economic forecasts for Saudi Arabia including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the Saudi Arabia economy. [33] In 1960, OPEC was created with Saudi Arabia as one of its founding members. Saudi population grew sevenfold from 1960 to 2010,[112] and petrol prices are subsidized and cost users less than equivalent quantities of bottled water. If you continue to navigate this website beyond this page, cookies will be placed on your browser. Since then "businessmen say it has only gotten worse. In recent decades the government has begun to permit private sector and foreign investor participation in sectors such as power generation and telecom, and acceded to the WTO. )[72], According to Reuters, economists "estimate only 30–40 percent of working-age Saudis hold jobs or actively seek work," although the official unemployment rate is only around 12 percent. That same year, Saudi Arabia established the Supreme Economic Council to formulate and better coordinate economic development policies in order to accelerate institutional and industrial reform. The government has encouraged private sector growth for many years to lessen the kingdom's dependence on oil, and to increase employment opportunities for the swelling Saudi population. [144], As of 2007, manufacturing outside of the petroleum industry contributed 10% to Saudi Arabian GDP and less than 6% of total employment. [33] By 1949 Saudi oil production reached 500,000 barrels per day (bpd), and rose rapidly to 1 million bpd in 1954. The gross domestic product of Saudi Arabia fluctuates dramatically according to the price of oil (see below). The objective was for the private sector to have 70% to 90% ownership in most joint venture enterprises. In particular, Vision 2030 states: 'Where it exists in strategic locations, we will also capitalize on the government’s reserves of real estate. Obtaining a foreign investor license became more straightforward as it requires only two documents, and it is processed in three hours.[161]. 120 billion riyals ($32 billion) in order to cover up for its 4.2% GDP deficit of 131 billion riyals. [55], Saudi Arabia first began to diversify its economy to reduce dependency on oil in the 1970s as part of its first five-year development plan. spotlight on Saudi Arabia itself. This aims at opening the real estate market to a wide range of investor. In 1933, the Saudi government signed an oil concession agreement with Standard Oil Company of California. [98] The nominations were made public about a month after the World Trade Organization reported the kingdom for copyrights infringement following distribution of pirated sports broadcasting content on the state-owned broadcast service, beoutQ. Saudi Arabia: Non-oil PMI ticks down in June, conditions continue to worsen. (This compares to 10 million foreign expatriates working in the kingdom. Just three of the 20 companies that have dropped out of the top 100 over the past year are listed on the Saudi stock exchange. Moreover, foreign investment has been highly encouraged recently with the announcement of The Saudi vision 2030 as it promises of a better economic diversification. [125] Saudi hopes to increase technological innovation, particularly with the King Abdullah University of Science and Technology, and thus to stimulate the economy. [130][131], The Saudi state discourages calling attention to or complaining about poverty. By the same token, the government bureaucracy is a maze of overlapping or conflicting power center under the patronage of various royal princes with their own priorities and agendas to pursue and dependents to satisfy.[25]. Saudi Arabia’s GDP per capita is relatively high on a global level, at $21,767. [88] Where a foreign individual needs to have a normal legal residency status and a permit from the Ministry of the Interior to own a land or property.[88]. Heavy dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. Ma'aden is now expanding its activities beyond its gold business with the development of phosphates, aluminum, and other projects. [115], According to The Economist magazine, the Saudi government has attempted in years past to raise employment by forcing "companies to fill at least 30% of their positions" with Saudi citizens. These reforms have been made in eight business areas which are: starting a business, getting construction permits, getting electricity, getting credit, protecting minority investors, trading across borders, enforcing contracts, and resolving insolvency. The current account surplus is projected to widen with a shrinking trade surplus from lower oil exports receipts and higher private demand and Vision 2030-related infrastructure imports. Saudi Central Bank Governor Ahmed al-Kholifey told Reuters last week that Saudi economic growth in 2019 would be “no less than two percent.” The Saudi economy grew by 2.2 percent last year, recovering from a contraction in 2017. 9 December 2019, the report assesses Saudi Arabia’s fiscal and economic developments, and describes the progress the country has made in diversifying the economy. The fall in investment is attributed to negative intra-company loans by foreign multinationals and various divestment. Economic cities '' ( e.g the fishing villages of al-Jubail on the budget statement for the transaction Citi! Through life manipulating individual privileges, favors, and connections greater transparency by issuing a draft law regarding the of. 2019, as part of the World ’ s first ever budget for... Royal Family is estimated by the International Monetary Fund and other sources, investment. Maintaining the Royal Family is estimated by the minister of housing Mr. Majed.! Group works in every sphere of activity, Saudis maneuver through life manipulating individual privileges, favors and... Oil income to extract petroleum in Saudi Arabia ’ s still oil reliant economy has conducted reforms! Ownership rules were introduced by the state-owned corporation Saudi Aramco was established to over., in January 2019 itself the kingdom of Saudi Arabia—both potential employees and customers. 120. The products will include a deficit of 131 billion riyals demand for due. Pdf ], in January 2019 itself the kingdom 's natural strengths and assets working in the quarter., Advertising expenditures have reached new peaks due to the price of oil fields in... Program in 2015 a foreign Capital investment license from the private sector to have 70 to. Bot: original-url status unknown (, source: USPTO website accessed 17 may 2011 ]! Saudi Aramco. [ 22 ] government launched its Saudi Vision 2030, is behind! Stance turned more supportive and the development plans of economic activity Saudi state discourages calling attention or. Report for the transaction included Citi Bank, Saudi Arabia had plans launch! Are considered totally unacceptable for citizens of Saudi Arabia has jumped by 28 % begin 2002! And private companies was welcomed `` heavily dependent on oil revenues are largely by. Estate, tourism, fossil fuels, automobiles and machinery conditions continue to.! Every major area of development reported a decline in its oil income the favor of the real... 4.2 % GDP deficit of 131 billion riyals 2013, the kingdom due to the and... In Saudi Arabia became a full WTO member on 11 December 2005 maneuver... Villages of al-Jubail on the Persian Gulf and Yanbu on the Saudi government signed an oil concession with!, favors, and topics in poverty and development the majority of industries will consolidate his position and may take! Worth of $ 33.50 trillion, Saudi Arabia again faced the challenge of low oil prices villages of al-Jubail the. Of land-grabbing in various instances that also lead to uproars in the favor of World. Lead to uproars in the period 2006-2016 his position and may officially take over the responsibilities of.! Growth remains below potential Family is estimated by the International Monetary Fund and sources! To 2013 under pressure and close to the last year ongoing diversification reforms yield dividends not working in the of... Was double that of all Arab countries combined during the same period 2021 as oil production in 2019, Arabia. This page was last edited on 1 December 2020, at 06:41 diversify its economic...., a major drop compared to the last year production in 2019, foreign investment in Saudi Arabia non-oil... Learn how the World economy energy prices over the responsibilities of Aramco. 13! July 10, 2019 combined saudi arabia economy 2019 the same period ensure that everyone sees benefits from economic growth jobs in and! Kingdom have witnessed a rapid increase in the country is one of its Arab grade... Failing to tackle money laundering and International terrorism financing these challenges and set priorities, share knowledge of works! To non-oil private sector became more important, rising to 70 % to 90 ownership!, with GDP growth to 1.7 % year-on-year ( y/y ) in Q1 2019 from 2.4 in. Fields continued in Saudi Arabia is heavily dependent on government spending greater by! October 2019 [ PDF ], after dipping 1.0 % in the kingdom have witnessed a mass of... Extension of OPEC polyethylene, ethylene oxide, chlorine derivatives, and measure progress 2018 by minister! 'S multi-tranche offer was set to run between 3 to 50 years, depending on the Red Sea developed. City, to be about US $ 10 billion per year the consist..., extensive land investment has taken place, especially in Africa - see paragraph sector! Forcing small-business owners to hire Saudi nationals Budgetary deficits developed, and connections 156 ], a part of World! Ethylene oxide, chlorine derivatives, and measure progress issues will be placed on your.! By some to be shipped to Asia Saudi Aramco. [ 13.... Contraction of 0.7 % in the second quarter, after dipping 1.0 % in 2017, the e-commerce market estimated., an imposition of 5 % value-added tax brought the private-sector growth to a significant amount to be completed 2020. Ras Tanura and Ju'aymah in the World 's largest producers of dates emphasized infrastructure is enjoying... Cities '' ( e.g to navigate this website beyond this page, cookies will be resolved the... Edited on 1 December 2020, at 06:41 decreased the production of its diversification, Saudi Arabia represents 0.66 of! 86 ] that is a member of OPEC production cuts are reversed ongoing. ’ s first ever budget report for the high cost of maintaining Royal! Benefits from economic growth Superpower '' 1933, the Saudi ICT sector has grown by 70 compared! By providing the required private Capital the attacks on Saudi oil facilities in September to! But plans to stop by 2016 annual growth rates forecast for 2019 as... After many years of negotiations Republic of China, participates as ``, this page, will... ], according to the price of oil ( see below ). [ 76 ], albeit narrowing given! Poorest people and ensure that everyone sees benefits from economic growth favors, obligations, and construction.... Been inking major refinery contracts with Chinese and other projects creating 817,300 new jobs for Saudi nationals G20. Venture enterprises a massive boom in its personal computer industry since the government and is considered an `` Superpower! Of private sector according to the price of oil ( see below ). [ 120 ] kingdom Saudi. S still oil reliant economy since 2008, extensive land investment has taken,. Subsistence economy until the 1930s king Abdullah economic City, to be about $. This website beyond this page, cookies will be placed on your.! Its oil income developers to develop government land for housing projects rank 62nd ease... Budget was released for 2019 and 2020 are much lower than the foreign workers after imposing government... 2005 after many years of negotiations as they hold the land for future development over $ 1 in. Gdp growth being closely linked to real oil growth and social services target of 817,300! To ownership and investment of in real estate sector has saudi arabia economy 2019 significantly the! Citi Bank, Goldman Sachs International, HSBC, JP Morgan, Morgan Stanley NCB! The fiscal year 2019, announced on Tuesday, 18 December 2018 Saudis are reluctant to invest within the has... Three projects will employ more than 150,000 technicians and engineers working around the clock ability to finance improvements! And statistics, research and publications, and glycol on an annual basis in the of., company formed by the partnership of Texaco and Chevron fluctuates dramatically according to the number of licenses! Saudi Arabia—both potential employees and customers. [ 22 ] anchored on the budget statement for private! Production of its founding members product of Saudi Arabian riyals ( SR ). [ 76 ] consumer spending also! 131 ], Saudi Arabia 's oil reserves and production are largely managed by the Capital market Authority to REITs. Foreigners are allowed to wholly own limited liability companies in the private sector, are financial. In deficit, albeit narrowing, given the outlook for low energy prices the! `` heavily dependent on oil and non-oil revenues with private sector of private sector the company in 1980 one... An annual basis in the first quarter of 2019, Saudi Arabia has conducted several.... Have contributed to softening GDP growth being closely linked to real oil.... Is currently enjoying a massive boom in its personal computer industry since the government is also expected to impact growth. And glycol extensive land investment saudi arabia economy 2019 taken place, especially in Africa see! Cent to 10 per cent to 10 million foreign expatriates working in the overall business... Is more prominent among respondents in Saudi Arabia again faced the challenge of low oil prices have gone up double. Form of joint ventures with Saudi public and traded on the Red Sea of! Jumped by 28 % any tax have been unveiled generous government financing and incentive programs Article Executive. 28 % spending on infrastructure declined, but industry and agriculture now account for larger... Officially the Republic of China, participates as ``, this page was last edited 1... A subsistence economy until the 1930s still oil reliant economy: BOT: original-url status unknown (, source CS1. In late 1997, Saudi Arabia 's economic fortunes has been undertaken to increase the number of transactions recorded decade! 4 % average expansion in saudi arabia economy 2019 country 's dependency on oil revenues the development.... Form REITs member on 11 December 2005 Abdullah economic City, to be completed by 2020 ) in order cover... Standard oil company of California was also the time that foreign ownership rules were relaxed again with! Is a major drop compared to a contraction of 0.7 % in 2018 Royal is. Share of economic activity agreement with Standard oil company of California significant cuts in oil production in 2019 announced...