US Report: Saudi Economic Diversification Appear to be Starting to Bear Fruit

 Continued progress with economic diversification will require the deepening of ongoing reforms - SPA
Continued progress with economic diversification will require the deepening of ongoing reforms - SPA
TT

US Report: Saudi Economic Diversification Appear to be Starting to Bear Fruit

 Continued progress with economic diversification will require the deepening of ongoing reforms - SPA
Continued progress with economic diversification will require the deepening of ongoing reforms - SPA

In its most recent report, the Arab Gulf States Institute in Washington reveals that Saudi Arabia's diversification efforts are bearing fruit, while also underscoring the enduring signs of progress within the Kingdom.

The report's author, Tim Callen, former assistant director in the Middle East and Central Asia department at the International Monetary Fund, says that countries who are as heavily reliant on oil exports as Saudi Arabia have found economic diversification very difficult, stressing however, that only few "have approached the challenge with such strong political commitment, such a comprehensive plan, and the vast resources to finance the needed investment as Saudi Arabia."

Callen says that the Saudi government has implemented an impressive list of economic reforms under Vision 2030, including improving the business climate and legal framework. He also highlighted how the Kingdom worked on reducing restrictions on women’s employment, strengthening domestic capital markets, reducing energy subsidies, and developing new sectors of the economy, such as tourism.

"Evaluating progress across four dimensions – exports, output, government revenue, and employment – reveals that, although oil remains a dominant force in the Saudi economy, the kingdom’s diversification efforts appear to be starting to bear fruit."

- Exports The report says oil (crude and refined products) still dominated the Saudi economy in 2022, accounting for 74% of total exports of goods and services, but this is well below the 84% average share in 2012-13. Most of the decline in the share of oil in Saudi exports is due to the expansion of petrochemical exports and tourism.

"The share of petrochemicals rose from 9% of goods and service exports in 2012-13 to 12% in 2022. Travel exports (what Saudi Arabia receives from non-nationals visiting the country) increased from 2% in 2012-13 to 5% in 2022," it added.

- Output

The private sector’s share of the kingdom’s nominal gross domestic product grew from 37% in 2012-13 to 39% in 2022. The non-oil sector, which includes the public and private sectors, made up 56% of GDP in 2022, up from just under 52% in 2012-13. Correspondingly, the private sector’s share of GDP in real terms (after adjusting for price effects) was 41% in 2022, compared to 39% in 2012-13.

- Govt. Revenue

The report notes that Saudi Arabia hwe achieved substantial advancements in diversifying the channels of government budget revenue, saying "non-oil revenue rose to 32% of total government revenue in 2022, up from less than 10% in 2012-13. The introduction of the value-added tax in 2018 and the rate increase from 5% to 15% in 2020 have provided most of the boost to non-oil revenue."

- Employment

Saudi workers accounted for 23% of total employment (Saudi and non-Saudi) in the private sector at the end of 2022, compared to 16% in 2016 (the earliest year for which data is available). The share of Saudi workers identified as employed in the public sector fell to 42% at the end of 2022, down from 45% in 2016.

The report stressed that Saudi Arabia’s diversification efforts "do seem to be bearing fruit, with progress in all four areas considered."

"Looking forward, continued progress with economic diversification will require the deepening of ongoing reforms and their consistent implementation to raise productivity in the economy."

 

 

 



China, US Discuss Tariffs, Farm Trade at First Trade Council Meeting

US and Chinese flags are seen in this illustration taken March 20, 2025. (Reuters)
US and Chinese flags are seen in this illustration taken March 20, 2025. (Reuters)
TT

China, US Discuss Tariffs, Farm Trade at First Trade Council Meeting

US and Chinese flags are seen in this illustration taken March 20, 2025. (Reuters)
US and Chinese flags are seen in this illustration taken March 20, 2025. (Reuters)

China and the United States held their first trade council meeting under a bilateral economic and trade consultation mechanism via ‌video link ‌on Friday, China's ‌commerce ⁠ministry said on ⁠Saturday.

The two sides held "candid, in-depth and constructive discussions" on implementing outcomes ⁠from previous trade consultations, ‌including ‌tariffs, a reciprocal ‌tariff-reduction arrangement involving $30 ‌billion on each side, agricultural trade and other issues of ‌note, the ministry said.

Both sides will ⁠continue ⁠to use the council to address trade concerns, expand cooperation and reduce outstanding issues, it added.


IMF Says More Work Needed on Lebanon Reforms

A man walks past Lebanon's Central Bank headquarters in Beirut on November 10, 2026. (AFP)
A man walks past Lebanon's Central Bank headquarters in Beirut on November 10, 2026. (AFP)
TT

IMF Says More Work Needed on Lebanon Reforms

A man walks past Lebanon's Central Bank headquarters in Beirut on November 10, 2026. (AFP)
A man walks past Lebanon's Central Bank headquarters in Beirut on November 10, 2026. (AFP)

The International Monetary Fund said on Friday that more work was needed to reach an agreement on restructuring Lebanon's banking sector, one of the steps towards unlocking billions of dollars in financial assistance.

An IMF staff-level agreement reached in April 2022 laid out conditions to unlock assistance, including a law on the distribution of losses in the banking sector, known as the financial gap law, which parliament has still not voted on.

In a statement at the end of meetings that began on Tuesday, the IMF said "there was progress in further clarifying the approaches under consideration by the Banque du Liban (BdL) and the Government regarding banking sector reform, the draft financial regulation law and the recovery of deposits, and aligning them with international standards".

It however noted that "further work is needed to reach an agreement on a strategy for an effective and durable restructuring of Lebanon's banking sector, leading to a sound and resilient system".

The cabinet submitted a draft of the law to parliament in 2025, but the text is contested by the banking sector and political parties, preventing a vote.

Differences over estimates of losses and their distribution have stalled negotiations with the IMF.

In 2022, the government estimated losses resulting from the 2019 financial crisis at around $70 billion, a figure believed to have increased over the last seven years during which the crisis has remained unresolved.

Lebanese Finance Minister Yassin Jaber said during a news conference that he hoped to "achieve progress that would allow us to reach an agreement on a program with the IMF and sign it during the first quarter of next year, and by its end at the latest".

Lebanon's economic crisis, which the World Bank has ranked among the worst since 1850, has deprived depositors of access to all of their funds, destroyed confidence in the banking sector and led to greater reliance on cash liquidity in various economic and commercial activities.


Silver Demand Seen Down 5% This Year Due to Weaker Jewellery Purchases

Silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. (Reuters)
Silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. (Reuters)
TT

Silver Demand Seen Down 5% This Year Due to Weaker Jewellery Purchases

Silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. (Reuters)
Silver bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, January 10, 2025. (Reuters)

Silver demand is expected to fall by 5% in 2026 due to weaker jewellery demand and lower consumption in solar cells, where high prices have accelerated substitution, research showed on Friday.

Research done by consultancy Metals Focus for the Silver Institute puts demand at 1.08 billion troy ounces this year.

Silver, used in jewellery, electronics, electric vehicles and solar panels as well as for investment, is ‌down 59% ‌to $50 an ounce since retail buying drove prices ‌to ⁠a record high ⁠of $121.6 in January.

The base for that rally was created in 2025, when silver surged 147%, as massive inflows of the metal to US inventories due to tariff uncertainty and into silver-backed exchange-traded products (ETPs) tightened liquidity in the London market.

This year, expectations for higher interest rates, a stronger dollar and higher bond yields have weighed on investment ⁠sentiment.

Silver released through ETP selling, outflows from stocks ‌in the US and a smaller ‌market deficit improved liquidity in the physical market, the Silver Institute and ‌consultancy Metals Focus said on Friday.

Metals Focus sees net ETP ‌outflows of 45 million ounces this year after 278 million ounces of inflows in 2025.

As of early November, ETP holdings stood at 1.25 billion ounces.

Industrial demand is expected to fall by 3% in 2026 as installations ‌in photovoltaics have fallen short of expectations, particularly in China, while January's record silver prices accelerated ⁠substitution.

Meanwhile, demand ⁠for jewellery and silverware is forecast to decline by 22% and 17%, respectively, as higher prices and weaker rural spending in India encouraged purchases of smaller, lighter products.

Demand in China and the US is also subdued. Strong retail investment in late 2025 and early 2026 gave way to far more subdued buying from March as silver prices fell, Metals Focus said.

It expects global bar and coin demand to fall 2% this year, with US retail investment hitting its lowest level since 2010.