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Saudi Trade Balance Touches SAR 113 Bn Surplus in Q2

Buildings are seen in Riyadh, Saudi Arabia, December 18, 2017. Picture taken December 18, 2017. REUTERS/Faisal Al Nasser
Buildings are seen in Riyadh, Saudi Arabia, December 18, 2017. Picture taken December 18, 2017. REUTERS/Faisal Al Nasser
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Saudi Trade Balance Touches SAR 113 Bn Surplus in Q2

Buildings are seen in Riyadh, Saudi Arabia, December 18, 2017. Picture taken December 18, 2017. REUTERS/Faisal Al Nasser
Buildings are seen in Riyadh, Saudi Arabia, December 18, 2017. Picture taken December 18, 2017. REUTERS/Faisal Al Nasser

Saudi Arabia’s trade balance, representing the difference between the nation’s merchandise exports and imports, reached SAR113 billion ($30.12 billion) in the second quarter of 2023, as per recently released government data.

According to the General Authority for Statistics report, Saudi Arabia exhibited resilience in its trade performance, as the Kingdom’s overall merchandise exports reached SAR291.6 billion in the second quarter of this year, adapting to a 31.8% adjustment from SAR427.8 billion in the same period of the previous year.

The report highlighted that the decline in overall exports was predominantly driven by a 33.4 % drop in oil exports during the second quarter, amounting to SAR227.7 billion, compared to SAR341.6 billion during the same period of the previous year.

The GASTAT report added that Saudi Arabia’s non-oil exports, including re-exports, dipped 25.9 % in the second quarter to SAR63.9 billion from SAR86.2 billion in the same period of 2022.

On the other hand, non-oil exports, excluding re-exports, decreased by 30.8 % annually in the second quarter of 2023.

The report added that the Kingdom’s merchandise imports increased by 2 % or SAR3.5 billion to SAR178.9 billion in the second quarter, compared to SAR175.4 billion in the same period of the previous year.

The GASTAT report highlighted that chemical and allied products were the most important non-oil export goods in the second quarter of this year, constituting 29.6 % of total non-oil exports.

In the second quarter of this year, China was Saudi Arabia’s primary merchandise trading partner, with exports to the Asian nation amounting to SAR48.8 billion or 16.7 % of the total.

On the import side, China held the lead, accounting for 20.9 % or SR37.4 billion in imports in the second quarter of 2023.

China was followed by the US and the UAE, with imports valued at SAR15.1 billion and SAR10.6 billion, respectively.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.