Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 7/18/2017
The Saudi Arabian economy is the largest in the Gulf region, and Saudi Arabia is the only G-20 member country in the region. Saudi Arabia has an oil-based economy with petroleum accounting for approximately 62 percent of government revenues, 44 percent of GDP, and 72 percent of export earnings in 2016. Saudi Arabia’s GDP is estimated at $646 billion (2015 World Bank figures). In response to sustained low oil prices and realizing that a primary commodity-based economy is not sustainable, the Saudi Arabian Government (SAG) launched in 2016 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.

Economists predict that fiscal deficits will continue as global oil prices remain well below the 2014 high mark ($120 per barrel). As a result, the government has implemented fiscal austerity and revenue-generating policies, including controls on government spending, reducing subsidies, identifying additional revenue sources, and other measures.  In January 2017, the government announced the Fiscal Balance Program, a fiscal recalibration regime designed to achieve a balanced budget by 2020. Current government efforts to fund the budget deficit include the sale of government bonds, increases in non-oil revenues, and the privatization of state assets, including plans to offer a small percentage of Saudi Aramco shares in an initial public offering.

With oil prices staying low and an IMF GDP growth forecast of less than 0.5 percent this year, the Kingdom continues to accelerate its economic diversification efforts in the short term as part of the SAG’s ambitious Vision 2030 plan. 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.
Saudi Arabia is the second largest U.S. goods export market in the Gulf region behind the UAE, and the Kingdom is America’s 23rd largest goods trading partner. Goods exports in 2016 totaled $18.0 billion (down 8.7 percent from 2015); imports totaled $16.9 billion, resulting in a trade surplus of $1.1 billion.  Major U.S. export products include:  transportation equipment ($8.6 billion); machinery (except electrical) ($2.2 billion); chemical products ($1.9 billion); computer and electronic products ($1.1 billion); and fabricated metal products ($922.7 million).

U.S. total exports of agricultural products to Saudi Arabia, our 17th largest agricultural export market, totaled $1.4 billion in 2016. Leading export categories include: corn, rice, vegetable oils, tree nuts, and soybeans. U.S. services exports to Saudi Arabia totaled $9.9 billion in 2015 (latest data available); services imports totaled $1.1 billion, resulting in a trade surplus of $8.8 billion.  Leading services exports from the U.S. to Saudi Arabia were in the travel, maintenance and repair services, and financial services sectors. For the first quarter of 2017, U.S. exports continued roughly on pace vis-à-vis 2016 levels, while the long-time trade deficit has moved into trade surplus, given Saudi Arabia’s continued demand for imports and declining value of Saudi crude exports to the United States.

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