Economic Overview

Saudi Arabia is the largest economy in the Middle East and the richest Arab country. The policy of large-scale public works undertaken by the authorities, 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. However, the economy of Saudi Arabia is almost entirely based on oil, with GDP growth being closely linked to real oil growth. After a recession in 223 (-0.8% of GDP) due to oil production cuts and lower oil prices, the kingdom returned to growth in 2024, with real GDP increasing 1.3% compared to the previous year, according to preliminary government data. Non-oil growth significantly outpaced overall GDP, rising by 4.3%, while oil activities declined by 4.5% and government activities grew by 2.6%. According to the IMF, overall GDP growth is projected to accelerate to 4.7% in 2025, assuming the 1 mbpd voluntary oil production cuts are gradually phased out from October 2024 to September 2025, with an average growth of 3.7% per year thereafter.

Concerning public finances, the 2024 budget deficit was officially estimated at 2.8% of GDP, up from 2% in 2023, as spending growth outpaced revenue growth, which was constrained by lower oil production in line with Opec+ commitments. In the 2025 state budget, authorities forecast a fiscal deficit of SAR 101 billion (USD 26.88 billion), as the kingdom continues spending on large-scale gigaprojects to diversify its economy away from oil. The deficit aligns with a preliminary government projection from September, representing about 2.3% of GDP. Fitch projects government debt to rise to 35.3% of GDP by the end of 2026, up from 29.8% at the end of 2024. Government deposits at the Saudi Central Bank (SAMA), including the current account and fiscal reserve, were estimated at 10.3% of GDP at the end of 2024. Contingent liabilities are rising as government-related entities (GRE), particularly the Public Investment Fund (PIF), increase borrowing, but remain small relative to GRE assets (PIF debt was 4.4% of its assets at the end of Q3 2024). Saudi Arabia's inflation in 2024 increased to 1.7% compared to the previous year, according to data from the General Authority for Statistics (GASTAT). The cost-of-living index stood at 111.30 points in 2024, based on the 2018 reference year, up from 109.45 points in 2023.

The standard of living in Saudi Arabia is one of the highest in the Middle East, with a GDP per capita (PPP) of USD 65,885 (IMF, 2024). According to the latest data available from the Saudi General Authority for Statistics,  unemployment among Saudis stood at 7.8% as of the third quarter of 2024, while the overall unemployment rate stood at 3.7%. The unemployment rate hit historic lows, with women’s labour force participation remaining well above the 30% target for 2030.

Foreign Trade

Trade represents around 62% of Saudi’s GDP (World Bank, latest data available). Saudi Arabia is the world's leading oil exporter. In 2023, its oil exports totalled USD 211.54 billion, representing 16.3% of global oil exports. In 2023, the main non-oil export items included chemical products, accounting for 29.7% of total non-oil exports, despite a 28.5% decline from 2022. Plastics, rubber, and related products followed, representing 24.9% of non-oil exports, down 24.2%. On the import side, machinery, electrical equipment, and parts were the most significant, making up 22.2% of total imports, rising by 24.3% from 2022. Transportation equipment and parts ranked second at 15.3%, with a 15.2% increase (data General Authority for Statistics).

In 2023, China was Saudi Arabia's top export destination, accounting for 16.6% of total exports, followed by Japan (10.2%) and India (9.4%). Exports to the top 10 destinations, including South Korea, UAE, the U.S., Bahrain, Taiwan, Malaysia, and Singapore, made up 65.3% of total exports.
China also led as the primary source of imports, representing 20.9% of total imports, followed by the U.S. (9.1%) and UAE (6.4%). Imports from the top 10 countries, including India, Germany, Japan, Switzerland, South Korea, Italy, and Egypt, accounted for 62% of total imports (data General Authority for Statistics). In order to promote international trade, attract foreign investment and diversify the non-oil sectors, the government announced plans to establish four “economic cities” in different regions of the country, providing a variety of advantages to companies that choose to locate their operations within their limits.

The country's trade balance, although structurally in surplus, fluctuates depending on the price of oil and global demand. In 2023, exports totalled USD 322.2 billion against USD 211 billion in imports. In the same year, the Kingdom exported USD 51.9 billion worth of services, importing USD 96.2 billion (WTO). Non-oil exports, including re-exports, declined by 13.7%, while national non-oil exports (excluding re-exports) dropped by 21.3%. Re-exported goods, however, saw a 26.7% increase. Merchandise exports fell by 22.2% due to a 24.3% decrease in oil exports, reducing the share of oil exports from 79.5% in 2022 to 77.3% in 2023. Imports rose by 9.0%, leading to a 48.9% decline in the merchandise trade balance surplus (data GAS). The overall trade balance was estimated to be positive by 7.4% of GDP in 2023 by the World Bank (from 16.9% one year earlier). According to data from the General Authority for Statistics, overall merchandise exports stood at SAR 866.5 billion in the first nine months of 2024, whereas imports reached SAR 633.3 billion (-4.2% and +10.2% y-o-y, respectively).