saudi arabia economy 2019

Its yearly production is 3.479 billion barrels (553,100,000 m3),[166] and it managed over 100 oil and gas fields in Saudi Arabia, including 284.8 trillion standard cubic feet (scf) of natural gas reserves. Beyond this, demand for professional real estate services is attracting regional educators such as DREI to provide courses on Saudi real estate, and even dedicated books focused on the market such as Saudi Real Estate Companion. [134] Saudi Arabia’s economic freedom score is 62.4, making its economy the 83rd freest in the 2020 Index. In 1933, the Saudi government signed an oil concession agreement with Standard Oil Company of California. However, their effect on Saudi Arabia's economic fortunes has been small. Latest full year GDP data for 2018 shows that the economy was able to absorb most of the disruptive effects of necessary economic reform enacted last year. In particular, Vision 2030 states: 'Where it exists in strategic locations, we will also capitalize on the government’s reserves of real estate. The banks hired for the transaction included Citi Bank, Goldman Sachs International, HSBC, JP Morgan, Morgan Stanley and NCB Capital. [132][133] Authors of the video claim that 22% of Saudis are considered to be poor (2009) and 70% of Saudis do not own their houses. [44], In June 1993, Saudi Aramco absorbed the state marketing and refining company (SAMAREC), becoming the world's largest fully integrated oil company. Saudi Arabia's Economic Update, October 2019 [PDF], Environmental and Social Policies for Projects. The electrical and electronic market was estimated to be around $3.5 billion in 2004. Moreover, foreign investment has been highly encouraged recently with the announcement of The Saudi vision 2030 as it promises of a better economic diversification. Saudi Arabia: GDP contracts deeply in Q2 as both the oil and non-oil sectors reel. By the same token, the government bureaucracy is a maze of overlapping or conflicting power center under the patronage of various royal princes with their own priorities and agendas to pursue and dependents to satisfy.[25]. Competing industrialising nations with food security problems in the quest for agricultural land are China, South Korea and India as well as the Gulf States Kuwait, Qatar and the UAE.[79][80][81][82][83]. Spending on infrastructure declined, but it rose markedly on education, health, and social services. Saudi Arabia’s 2020 budget will see an expenditure of 1.02 trillion riyals ($272 billion), compared to 1.05 trillion in 2019, and a revenue of 833 billion riyals, in line with pre-budget figures. [157] Since 2013, the Kingdom has declined in the overall Doing Business rankings, from 22nd to 92nd. We are pleased to present our analysis on the budget statement for the fiscal year 2019, announced on Tuesday, 18 December 2018. These include the $27 billion Ras Tanura integrated refinery and petrochemical project, the $9 billion Saudi Kayan[63] petrochemical complex at Jubail Industrial City, and the $10 billion Petro Rabigh refinery upgrade project. These have contributed to softening GDP growth to 1.7% year-on-year (y/y) in Q1 2019 from 2.4% in 2018. After a recession in 2017, the Saudi economy has rebounded modestly. A number of regional experts believe that most issues will be resolved as the market becomes more mature. However, significant population growth has strained the government's ability to finance further improvements in the country's standard of living. [citation needed], Saudi Arabia was a key player in coordinating the successful 1999 campaign of OPEC and other oil-producing countries to raise the price of oil to its highest level since the (Persian) Gulf War by managing production and supply of petroleum. [125] Saudi hopes to increase technological innovation, particularly with the King Abdullah University of Science and Technology, and thus to stimulate the economy. These reforms have been made in eight business areas which are: starting a business, getting construction permits, getting electricity, getting credit, protecting minority investors, trading across borders, enforcing contracts, and resolving insolvency. The remaining oil exports are transported via the east–west pipeline across the kingdom to the Red Sea port of Yanbu. Saudi Arabia’s benchmark Tadawul All Share Index (TASI) rose 0.2 percent, or 15 points, to end at 8,709 points on Sunday, the highest closing since July 2019. Ma'aden is now expanding its activities beyond its gold business with the development of phosphates, aluminum, and other projects. A 2003 survey by the Ministry of Social Affairs found 40% of all Saudi citizens live on less than 3000 Saudi riyals ($850) a month, (source: immigrants make up 38.3% of the total population, according to UN data (2019), Learn how and when to remove these template messages, Learn how and when to remove this template message, Saudi Arabian General Investment Authority, International Organization for Standardization, King Abdullah University of Science and Technology, the International Institute for Management Development, List of largest companies of Saudi Arabia, Saudi Arabian Basic Industries Corporation, Ministry of Petroleum and Mineral Resources, "World Economic Outlook Database, April 2019", "World Economic Outlook Database, October 2019", "World Economic Outlook Update, June 2020", "Inequality-adjusted Human Development Index (IHDI)", "Employment to population ratio, 15+, total (%) (national estimate) - Saudi Arabia", "Which 10 Countries Have the Most Natural Resources? [158], Saudi Arabian companies dominate 2009's "MEED 100", with companies listed on the Tadawul, accounting for 29 out of the region's 100 biggest publicly quoted companies ranked by market capitalisation. [55], The fifth plan (1990–95) emphasized consolidation of the country's defenses; improved and more efficient government social services; regional development; and, most importantly, creating greater private-sector employment opportunities for Saudis by reducing the number of foreign workers. The share for diversifying and expanding productive sectors of the economy (primarily industry) did not rise as planned, but the two industrial cities of Jubail and Yanbu—built around the use of the country's oil and gas to produce steel, petrochemicals, fertilizer, and refined oil products—were largely completed. The objective was for the private sector to have 70% to 90% ownership in most joint venture enterprises. [citation needed]. Public finances will remain in deficit, albeit narrowing, given the outlook for low energy prices over the next two years. The mismatch between the job skills of Saudi graduates and the needs of the private job market at all levels remains the principal obstacle to economic diversification and development; about 4.6 million non-Saudis are employed in the economy. Real Estate plays an important role in the Saudi Vision 2030 which maps out significant commitments by the Saudi Government relating to housing and the development of land for a variety of uses. The unemployment rate among Saudi nationals is the second highest in the GCC at 12.0% (as of Q3 2019) and is considered one of the biggest challenges for the economy. King Abdullah Economic City, to be completed by 2020) in an effort to diversify the economy and provide jobs. [121][122] However, in 2017 Saudi Arabia was granted 664 patents by the United States Patent and Trademark Office (USPTO) ranking the 23rd among 92 countries. In addition, since its formation, Ma'aden (through the Ministry of Petroleum and Mineral Resources) has collaborated with the government and local legislators to develop a regulatory framework for the governance of the mining industry. [68], According to many reports, the Saudi government is greatly interested in giving more liberty to the foreign investment system and in giving a 100% allowance to the foreign investors to work in the wholesale and retail sector in particular cases. Gaining money from large foreign direct investments is also not working in the favor of the government. [55], The seventh plan (2000–2004) focuses more on economic diversification and a greater role of the private sector in the Saudi economy. In answer to the question of why the Saudi economy is so dependent on foreign labor, the UN Arab Human Development Report blamed stunted social and economic development inhibited by lack of personal freedom, poor education and government hiring based on factors other than merit, and exclusion of women. These firms are "heavily dependent on government spending", which is dependent on oil revenues. [55], Saudi Arabia first began to diversify its economy to reduce dependency on oil in the 1970s as part of its first five-year development plan. The country jumped 30 places to rank 62nd in ease of doing business compared to the last year. [57], Saudi Arabia's first two development plans, covering the 1970s, emphasized infrastructure. [61], In 2019, Financial Times reported that the plans to float state-owned oil beneficiary Saudi Aramco were stranded between the company's attachment to the ministry and the need to meet the International standards. [117][118][119], Another statistic conducted by Bayt.com shows that over a quarter (28%) of professionals believe that there is a skills shortage in their country of residence. [164] Headquartered in Dhahran, Saudi Arabia,[165] Saudi Aramco operates the world's largest single hydrocarbon network, the Master Gas System. [87] Foreigners (being non-GCC nationals) are entitled to ownership and investment of in real estate with some conditions. [29] Mean wages were $14.74 per man-hour in 2009. [169], The Saudi Arabian Basic Industries Corporation SABIC was established by a royal decree in 1976 to produce chemicals, polymers, and fertilizers. Significantly, it will also be happening around the time that Saudi officials have indicated [62], Saudi Arabia has announced plans to invest about $47 billion in three of the world's largest and most ambitious petrochemical projects. Consumer spending was also restrained after a sharp increase in prices for energy, electricity and water earlier in 2018. [138] In 2011, analysts estimated 500,000 new homes/year were needed to match the growth in Saudi population, but as of early 2014 only 300,000 to 400,000 houses/year were being built. [51] Saudi Arabia turned towards international debts following a decline in its oil income. For some years it grew very expensive wheat using desalinated water for irrigation,[57] but plans to stop by 2016. source: World Bank. Real estate plays a fundamental role in the country's non-oil economy. Most Saudi oil exports move by tanker from oil terminals at Ras Tanura and Ju'aymah in the Persian Gulf. Saudi Arabia's economy slowed sharply in the second quarter amid oil output cuts by the world's largest crude exporter, ... down from annual growth of 1.66% in the first quarter of 2019. Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). As per the report released by UNCTAD in June 2018, Saudi Arabia's foreign direct investment was only $1.4 billion in 2017, down from $7.5 billion the year before and as much as $12.2 billion in 2012. Oil wealth has increased the standard of living of most Saudis. [109] As of 2013, due to the rapid population growth of Saudi Arabia,[110] per capita income in Saudi was "a fraction of that of smaller Persian gulf neighbors", even less than petroleum-poor Bahrain. [126], The cost of maintaining the Royal Family is estimated by some to be about US$10 billion per year. Growth is expected to rise to 2.2% in 2021 as oil production cuts are reversed and ongoing diversification reforms yield dividends. [113] With production stagnant, growth in population and domestic energy consumption means a decline in per capita income unless oil prices rise to match that growth. Establishing fast-track licenses and special finance packages to encourage private sector investment in housing projects. The mid-1980s was also the time that foreign ownership of business was allowed. Saudi businessmen reported a decline in sales for 2018, blaming the government. Another is that the REDF's maximum loan is 500,000 SR ($133,000), while in 2012 the average price for a small free-standing home in Riyadh is more than double that—1.23 million SR ($328,000). However, the economy of Saudi Arabia is almost entirely based on oil, with GDP growth being closely linked to real oil growth. From The Report: Saudi Arabia 2019 A welcome improvement was seen in the Kingdom’s economic fortunes in 2018, with GDP growth of 1.2% in the first quarter marking the first expansion of the national economy after five consecutive quarters of contraction. The attacks on Saudi oil facilities in September led to a significant supply disruption which is also expected to impact 2019 growth. [87][93], The introduction of  REITs was a part of the National Transformation program, one of the Saudi Arabia’s Vision 2030 programs, and has targets of, Saudi Arabia's private sector is dominated by a handful of big businesses in the service sector, primarily in construction and real estate— Olayan, Zamil, Almarai, Mobily, STC, SABIC, Sadara, Halliburton, Baker Hughes, Flynas, Hilton, Zain, Yanbu Cement, Alhokair, MBC, Mahfouz, Al Rajhi and Alfanar. [133][137], 50% of Saudi Arabia's citizens own their own home, compared to the international average rate of 70% ownership, even though, it is beneath the international average, but it raised from 30% in 2011 according to the most recent census results. [12] Saudi Arabia is part of the G20 group of countries.[13]. A 2005 survey by the Riyadh Chamber of Commerce found 77% of businessmen polled felt they had to 'bypass' the law to conduct their operations. The economy of Saudi Arabia is one of the top twenty economies in the world, and the largest economy in the Arab world and the Middle East. [75], One obstacle is social resistance to certain types of employment. [71] In January 2014, the Saudi government claimed it had lowered the 90% rate, doubling the number of Saudi citizens working in the private sector employment to 1.5 million. With US shale production continuing to increase in the first half of 2019, Saudi Arabia’s oil production cuts were deeper than pledged, with output in July standing at 9.65mbd versus the voluntary limit under the OPEC+ accord of 10.3mbd. With its absolute monarchy system of government, large state sector and supply of welfare benefits, the Saudi economy has been described as, a bewildering (at least to outsiders) combination of a feudal fealty system and a more modern political patronage one. Moreover, the government has been seeking to achieve greater transparency by issuing a draft law regarding the involvement of private sector. [87][85] The REITs consist of units representing the ownership of the underlying real estate. [48] Moreover, SAGIA's data indicate that licenses provided to foreign investment have been increased by 130% in the first quarter or 2018 as a result to the current reforms in economy. [56] The fishing villages of al-Jubail on the Persian Gulf and Yanbu on the Red Sea were developed. This belief is more prominent among respondents in Saudi Arabia (39%).[120]. This makes it far cheaper and thus far more profitable to extract petroleum in Saudi Arabia than in many other places. [34][35] Moreover, in 1951, Aramco started operating Trans-Arabian Pipeline that used to transform oil from the eastern region of Saudi Arabia to the Mediterranean Sea, passing by Jordan, Syria and Lebanon. The number of new licenses approved for foreign businesses has grown by 70% compared with 2018. July 5, 2020 Nevertheless, deflationary pressures persist, reflecting negative growth in rental prices, in part due to the exit of some 1.8 million foreign workers since 2017. In 2016, Mohammad bin Salman announced Saudi Vision 2030, a plan to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism. The major expansion in this sector attracted the top real estate consultancies such as Jones Lang LaSalle,[89] Knight Frank[90] and Cluttons[91] to the country who have now opened offices in the country. [86] That is a major drop compared to the number of transactions recorded a decade earlier, which reached $239.93 billion. Welcome to KPMG Saudi Arabia’s first ever budget report for the Kingdom of Saudi Arabia (KSA). A report released by the Financial Action Task Force on 24 September 2018, says, "Saudi Arabia is not effectively investigating and prosecuting individuals involved in larger scale or professional [money laundering] activity" and is "not effectively confiscating the proceeds of crime". Almost two-thirds of Saudi nationals work in the public sector, while the private sector continues to struggle to create jobs for locals despite new policies of expat levies and expat-dependent fees aimed at encouraging Saudization. Due to a combination of factors—the East Asian economic crises, a warm winter in the West caused by El Niño, and an increase in non-OPEC oil production—demand for oil slowed and pulled oil prices down by more than one-third. [70], As of 2008, roughly two-thirds of workers employed in Saudi Arabia were foreigners, and in the private sector approximately 90%. [40] This created a worldwide oil glut, with the price of oil dropping from approximately $36 per barrel in 1980, to approximately $14 by 1986. [77] As of 2009, livestock population amounted to 7.4 million sheep, 4.2 million goats, half a million camels and a quarter of a million cattle. [96], In April 2000, the government established the Saudi Arabian General Investment Authority to encourage foreign direct investment in Saudi Arabia. Saudi Arabia acceded to the WTO (World Trade Organization) in 2005 after many years of negotiations. [140] However, as a part of the economic reforms that has been undertaken by the government to enhance the living standards within the country, new funding solutions have been established to boost the mortgages for existing and new borrowers in order to help financing their housing plans. Saudi Arabia’s GDP per capita is relatively high on a global level, at $21,767. GDP per capita (PPP) shrunk by 0.8% on average during the 1980s, grew 2.1% during the 1990s and 4.4% during the 2000s. [99] The nomination of al-Tuwaijri received criticism from human rights groups in mid-August 2020, demanding the rejection of the Saudi nominee due to the kingdom’s violation of human rights in addition to his silence over it. With 189 member countries, staff from more than 170 countries, and offices in over 130 locations, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries. Saudi Arabia Economic Statistics 2019 | International ... ... … Saudi Arabia is currently enjoying a massive boom in its personal computer industry since the deregulation of 2002. We face big challenges to help the world’s poorest people and ensure that everyone sees benefits from economic growth. [49], After the finance budget was released for 2019, Saudi Arabia planned to issue bonds worth approx. With a total worth of $33.50 trillion, Saudi Arabia has the second most valuable natural resources in the world. Not surprisingly, Saudi businesses that can compete outside the protected Saudi market are few. Officially the Republic of China, participates as ", This page was last edited on 1 December 2020, at 06:41. [148], According to the General Authority for Statistics (GASTAT), Saudi Arabia’s inflation accelerated to 6.2% in August 2020, as compared to the same month last year. [36] During the 1973 oil crisis, the price of oil rose from $3 per barrel to nearly $12, and the Saudi economy began to grow rapidly,[37] with GDP increasing from approximately $15 billion in 1973, to approximately $184 billion by 1981. [144], As of 2007, manufacturing outside of the petroleum industry contributed 10% to Saudi Arabian GDP and less than 6% of total employment. [150][151] The stock market capitalisation of listed companies in Saudi Arabia was valued at $646 billion in 2005 by the World Bank. The 2020 budget will include a deficit of 187 billion riyals. Meanwhile, the unemployment rate among Saudi women edged up to 68.9 percent in Q2 2019, from 68.3 percent in Q1 2019, data showed. In the first quarter of 2019, Saudi Arabia's budget has accomplished its first surplus since 2014. )—and US$2–3 billion in revenue. [59], Since 2017, in order to boost the economy and decrease the country's dependency on oil, Mohammed bin Salman has brought in multiple changes, including the raising of prices of gasoline and electricity, introduction of new taxes, and policy of Saudi workers over foreign workers.

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