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Saudi riyal (SR) (SAR)
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Importing a standard container of goods into Saudi Arabia requires:
Saudi Arabia is the 19th largest exporter and the 20th largest import market in the world. Saudi Arabia’s economy is petroleum-based, the oil industry comprises about 45% of Saudi Arabia’s nominal GDP. Saudi Arabia officially has about one-fifth of the world’s proven total petroleum reserves. The Government is attempting to promote growth in the private sector by privatising industries such as power and telecommunications.
|Export of goods and services||15.7||9.1||3.2|
|Import of goods and services||7.2||12.0||4.2|
|Short-term interest rates (%)||0.8||1.0||1.3|
|Exchange rate (per £)||6.01||5.94||5.50|
|Unit labour cost||-5.2||-2.2||0.0|
|Source: Oxford Economics|
Saudi Arabia is the largest and most stable economy in the Gulf. The Saudi economy weathered the recent economic and financial crisis far better than other economies in the area, thanks largely to its prudent economic and financial policies. After a rise of 6.8% in 2012, GDP growth is expected to slow to 4.3% this year, close to the new IMF forecast of 4.4%. The main reason for the slowdown will be a 3.5% decline in oil output. In 2014, GDP growth is forecast to pick up a little to 4.6% as oil production rises. The non-oil private sector will benefit from a stronger global economy.
Saudi exports are geared very much to the major oil consumers. China is expected to overtake Japan as the largest exporter in the next 10 years, with India becoming the second largest market followed by the US and Korea. China and India both demanding more oil inflows to continue to fuel their expected rapid growth rates will mean Saudi exports to the Asian region will grow particularly strongly. Exports to Latin America will also accelerate as energy demand in the region picks up in line with economic development. India and Turkey will be the two fastest-growing sources of imports.
Large oil supply
Strongly dependent on the hydrocarbon sector
Unstable geo-political environment
Economic cities (see overleaf for further details)
The real estate market has not been immune to the regional property market woes
Saudi Arabia has launched the six “economic cities” initiative which is planned to be completed by 2020. These six new industrialised cities are intended to diversify the economy of Saudi Arabia, and are expected to increase per capita income levels. The six economic cities, is a part of an ambitious plan to place Saudi Arabia among the world’s top ten competitive investment destinations. The initiative will help diversify the oil-based economy by bringing direct foreign and domestic investments. This will open up opportunities in construction, healthcare and education sectors.
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