Saudi Arabia - Market OverviewSaudi Arabia - Market Overview
Saudi Arabia is the largest country in the Gulf region with a population of 32 million, and the largest economy in the Arab World with a GDP of USD 683.7 billion. It is the only G-20-member country in the region. The Saudi Arabian Government (SAG) exercises control over main economic activities of the country’s oil-based economy. Saudi Arabia has almost 16 percent of the world's proven petroleum reserves, plays a principal role in OPEC, is one of the world’s largest producers and exporters of crude oil, and is a large-scale oil refiner and producer of natural gas. According to Forbes Magazine, petroleum accounts for roughly 87 percent of budget revenues, 42 percent of GDP, and 90 percent of export earnings.
To diversify its economy away from oil, in 2016 the SAG launched a broad and ambitious socio-economic reform plan known as Vision 2030. The program is aimed at diversifying the economy, creating private sector jobs for a growing population, and placing government finances on a sounder footing. Vision 2030’s most significant goals and targets to be achieved by 2020 include: spurring private sector growth; increasing local content requirements in manufacturing, particularly in defense equipment and basic materials; enhancing Saudi government efficiencies; improving the provision of government services; increasing revenue generation through new taxes; transforming the Public Investment Fund (PIF) into the world’s largest sovereign wealth fund; providing affordable housing to citizens; developing Saudi Arabia’s capital markets; building a renewable energy sector; attracting greater foreign direct investment; privatizing dozens of government entities; expanding the ICT sector; further developing the mining sector; accelerating the development of the public transportation and the railway network; building an effective domestic tourism infrastructure; and expanding natural gas and petrochemical production.
In 2018 Saudi Arabia's economy emerged from recession, aided by the budget announced in December 2017 confirming the government's move away from austerity, built on higher oil earnings and the introduction of tax-raising measures, which is allowing the government to increase spending. On January 1, 2018, residential electricity rates were doubled, the price of gasoline went up by more than 80 percent, an across-the-board value-added tax (VAT) of five percent was introduced, and the government started charging employers a monthly fee for each expatriate worker they employ. Growth will remain elevated this year owing to a steady rally in global oil prices and the ongoing projects to reorient the economy away from hydrocarbons. Consumers and businesses are set to become more confident in their spending in 2018 and beyond. 
In 2016, U.S. exports of consumer-oriented food products to Saudi Arabia declined by approximately 11 percent to USD 508 million. Saudi Arabia is the largest importer of food and agricultural products in the Gulf Cooperation Council (GCC). The latest available U.N. trade data show Saudi Arabia imported USD 14.8 billion of agricultural and related products in 2016, a decline of approximately 23 percent from imports in 2015. This decline was mostly due to lower prices of grains, such as corn, wheat, barley and rice, and lower imported quantities of dairy product and frozen broiler meat. In 2016, Saudi Arabia imported approximately USD 7.8 billion of consumer-oriented food products, a 20 percent decrease from 2015. U.S. food products are generally viewed as meeting higher quality standards compared to those produced locally or imported from other countries. Although U.S. food products command higher price margins compared to imports from Asia and Arab countries, demand for U.S. food products in the Saudi market has been increasing in the past few years. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Saudi Arabia Trade Development and Promotion