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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.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 1,067.581,100.711,136.581,199.161,262.33
GDP (Constant Prices, Annual % Change) -0.81.53.34.13.6
GDP per Capita (USD) 32,53032,88133,28734,43135,534
General Government Gross Debt (in % of GDP) 26.228.330.631.933.1
Inflation Rate (%) 2.31.71.92.02.0
Unemployment Rate (% of the Labour Force) 3.80.00.00.00.0
Current Account (billions USD) 34.074.25-20.74-22.56-28.84
Current Account (in % of GDP) 3.20.4-1.8-1.9-2.3

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Agriculture accounts for 2.7% of Saudi Arabia’s GDP and employs 3% of the active population (World Bank, latest data available). Because of geographical and climatic constraints (droughts), Saudi Arabia imports most of its agricultural and food product requirements. Water scarcity is a serious regional problem that the country is likely to face in the coming years, as the growing cultivation of wheat presents the threat of water depletion. Saudi Arabia is the largest market for agriculture in the GCC region; however, productivity remains limited compared with the public investment that funds the sector. According to Saudi Agriculture, the agricultural contribution to GDP amounted to about USD 31 billion in 2024.

The industrial sector represents 47% of the GDP and employs 16% of the workforce. 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. Oil accounts for nearly 90% of exports and 70% of government revenues (and more than 40% of GDP). The share of the non-oil industrial sector has been increasing along with the economic diversification efforts of the Saudi authorities (although manufacturing currently represents only 15% of GDP). According to the General Authority for Statistics, the industrial production index rose by 2.1% year-on-year in December 2024, driven by growth in manufacturing activity and waste management services.

Lastly, services represent 44.9% of the GDP and employ 81% of the active population. This sector is mainly dominated by tourism, financial and banking services, and the insurance sector. Tourism generates very high revenues, thanks in particular to the Hajj, the pilgrimage to Mecca that takes place in the last month of the Islamic year, which all Muslims are expected to make at least once during their lifetime. In the first eight to nine months of 2024, Saudi Arabia ranked third globally for international tourist arrival growth, with over 61% (UN Tourism). Overall, the Kingdom recorded 30 million international arrivals in 2024, a new record, significantly up from 17.5 million visitors in 2019 when it first opened to international tourism. The Saudi government launched the “Financial Sector Development Program” as part of “Vision 2030”, aimed at enabling financial institutions to support the growth of the private sector, develop an advanced capital market and improve financial planning. Despite facing tighter liquidity, Saudi banks maintain healthy performance metrics: according to Fitch Ratings, strong gains in securities and trading boosted non-interest income for Saudi banks by SAR 1.4 billion in Q3 2024, driving a SAR 0.5 billion increase in combined profit to reach SAR 20 billion.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.8 16.3 80.8
Value Added (in % of GDP) 2.7 47.0 44.9
Value Added (Annual % Change) 4.1 -6.2 4.7

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Saudi Riyal (SAR) - Average Annual Exchange Rate For 1 USD 3.753.753.753.803.75

Source: World Bank - Latest available data.

 

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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).

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 153,163137,997152,849189,877211,028
Exports of Goods (million USD) 261,603173,854276,179411,184322,256
Imports of Services (million USD) 78,66056,26473,78182,29196,242
Exports of Services (million USD) 24,2438,98410,30334,66851,932

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 60.249.757.163.562.1
Trade Balance (million USD) 121,33647,944136,464235,292126,908
Trade Balance (Including Service) (million USD) 66,88566472,986187,66879,409
Imports of Goods and Services (Annual % Change) 9.5-19.98.312.49.9
Exports of Goods and Services (Annual % Change) -4.9-11.85.620.5-6.5
Imports of Goods and Services (in % of GDP) 26.124.824.423.327.4
Exports of Goods and Services (in % of GDP) 34.124.932.840.234.7

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 0.89.08.64.54.9
Volume of imports of goods and services (Annual % change) 6.58.95.53.42.8

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Saudi Arabia is a member of the following international economic organisations: Arab Monetary Fund (AMF), ICC, Gulf Cooperation Council (GCC) G-20, G-77, IMF, Arab League, WTO, among others. For the full list of economic and other international organisations in which participates Saudi Arabia click here. International organisation membership of Saudi Arabia is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Saudi Arabia can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2023
China 16.6%
Japan 10.2%
India 9.4%
South Korea 8.9%
United Arab Emirates 5.2%
See More Countries 49.7%
Main Suppliers
(% of Imports)
2023
China 20.9%
United States 9.1%
United Arab Emirates 6.4%
India 5.6%
Germany 4.4%
See More Countries 53.4%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
King: SALMAN bin Abd al-Aziz Al Saud (since 23 January 2015) - hereditary; the monarch is both chief of state and head of government
Crown Prince and Prime Minister: MUHAMMAD BIN SALMAN bin Abd al-Aziz Al Saud (since 27 September 2022)
Next Election Dates
None; the monarchy is hereditary
Current Political Context
Saudi King Salman bin Abdulaziz Al Saud has appointed Crown Prince Mohammed bin Salman Al Saud as prime minister in September 2022, a post historically held by the ruling monarch. The move, which came as part of a wider cabinet reshuffle, confirmed the growing power of Crown Prince Mohammed bin Salman Al Saud amid the transfer of further responsibilities from the King to his son. The transition of power is now well underway as is Mohammed bin Salman Al Saud's programme to modernise and diversify the economy. His position as prime minister formally makes him head of government, but he is already serving as the de facto ruler of Saudi Arabia as he oversees crucial economic and defence portfolios. He will likely consolidate his power even further before succeeding his father as King.
Saudi Arabia may have difficulties preserving stability in 2025 as the regional and international environment changes. The fall of the Assad government in Syria towards the end of 2024 would reduce Iranian power and create chances for Saudi participation in reconstruction, but it might also increase instability and security threats from extremist organizations. Furthermore, Israel's opposition to a Palestinian state continues to stand in the way of mending bilateral ties and could exacerbate tensions at home because of the broad sympathy for the Palestinian cause.
Main Political Parties
There are no political parties. However, certain political movements may exist (Islamists, Communists, Liberals, Greens, etc.), in the form of illegal organizations. The first municipal elections in Saudi Arabia took place in 2005.
Executive Power
The King is both the Chief of State and the head of the Government. The monarchy is hereditary. The Council of Ministers (cabinet) is appointed by the Monarch and includes many royal family members. The Council of Ministers does exercise both executive and legislative functions, but the legislative power is heavily tied to the King's authority and Islamic law. All decisions and regulations issued by the Council require the King’s approval to be enacted.
Legislative Power
There is no elected legislature in Saudi Arabia at the national level (although there are municipal elections). A Consultative Council was appointed in August 1993 which has 150 members and a chairman appointed by the King for four-year terms. This Council has limited powers and does not affect decision making or power structures in a concrete way.
 

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