Saudi Economy - July 2014 - CIT

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Overview of the Saudi Arabian economy as of July 2014 provided by the Committee for International Trade (CIT) at the Saudi Chambers of Commerce and Industry. Helpful charts and graphs provide background and context to the state of Saudi trade, investment and economic performance.

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Saudi Economy - July 2014 - CIT

  1. 1. 2014
  2. 2.  Saudi Arabia – key indicators.  Saudi Arabia underlying strengths.  Investment in Saudi Arabia.  Foreign trade of Saudi Arabia.  Saudi estimated Budget - 2014.  Reforms to Enhance Saudi Economy.  Towards Better UK–Saudi Relations. 2
  3. 3. 3 SAUDI ARABIA – KEY INDICATORS 2013  Area: 2000000 km2.  Population: 30 million.  GDP: $745 billion (preliminary)  GDP per Capita: $24847.  GDP Growth: 1.5 % (Current) 3.8% (Constant)  Non-Oil Sector GDP Growth: %7.  Private Sector Growth rate: 9.4%.  Exports:$367 billion .Imports:$153 billion.  Currency: Saudi Riyal (SR), SR 3.75 = $1.
  4. 4. SAUDI ARABIA -UNDERLYING STRENGTHS 4  Strong GDP growth.  Significant budget surplus .  Price level stability.  Owns 25% of world’s Oil reserves .  Fourth Largest Natural Gas reserve.  The largest economy in the Arab World, and among the top 20 Economies in the world (G20).  The Largest producer of Petrochemicals in the Arab World.  Open economy, a member of WTO.
  5. 5. 5 SAUDI ARABIA -UNDERLYING STRENGTHS Cont….  Political stability, member of many Arab & International Organizations.  An attractive environment for investment, among the top 20 recipients of Foreign Direct Investment in the world.  Investment incentives, Income tax free, financial facilities.  Ranked 22 in ease of doing businesses in 2013.  10th largest worldwide Exporter (excluding intra-EU (27) trade).  21st largest worldwide Importer (excluding intra-EU (27) trade).
  6. 6. 745 359 183 173 77 27 0 100 200 300 400 500 600 700 800 saudi Arabia U.A.E Qatar Kuwait Oman Bahrain $ Billion Saudi’s GDP among Gulf countries SAUDI ARABIA -UNDERLYING STRENGTHS Cont…. 6
  7. 7. 745 794 549 257 208 97 0 100 200 300 400 500 600 700 800 900 saudi Arabia Turky Iran Egypt Algeria Morocco $ Billion Saudi’s GDP among MENA countries SAUDI ARABIA -UNDERLYING STRENGTHS Cont…. 7
  8. 8. SAUDI ARABIA -UNDERLYING STRENGTHS 8 Cont…. Saudi Arabia’s ranking in global competitiveness 2013/2014 Indicator Ranking Among Arabic Countries Ranking Among World Countries Ease of doing businesses 1 22 Global competitiveness 3 20 Institutions 4 20 Infrastructure 4 31 Macroeconomic environment 2 4 Property rights 5 27 Health and primary education 5 53 Higher education and training 3 48 Goods market efficiency 4 27 Financial market development 3 27 Technological readiness 3 41 Market Size 1 23 Business sophistication 3 28 Innovation 3 30
  9. 9. SAUDI ARABIA -UNDERLYING STRENGTHS 9 Cont…. Saudi Arabia’s ranking in Financial Stability Among MENA Countries Country Ranking Among MENA Countries Ranking Among World Countries Saudi Arabia 1 1 Emirates 2 5 Kuwait 3 15 Morocco 4 32 Tunisia 5 35 Bahrain 6 37 Egypt 7 46 Jordan 8 49 Turkey 9 54
  10. 10. 10 INVESTMENTS IN SAUDI ARABIA
  11. 11. SAUDI ARABIA -UNDERLYING STRENGTHS 11 Cont…. Saudi Arabia’s ranking in Business Environment Among MENA Countries Country Ranking Among MENA Countries Ranking Among World Countries Bahrain 1 16 Saudi Arabia 2 17 Emirates 3 22 Kuwait 4 29 Tunisia 5 32 Turkey 6 34 Jordan 7 40 Morocco 8 43 Egypt 9 48
  12. 12. •12 16.4 6.4 5.5 4.4 1.1 0.3 0 2 4 6 8 10 12 14 16 18 Saudi Arabia Egypt Emirates Qatar Oman Kuwait FDI (Inflows) Bn US$ -2011
  13. 13. 13 FDI TO SAUDI ARABIA BY COUNTRY - 2011 17% 9% 8% 9% 8% 5% 4% 4% 3% 2% 1 % USA Kuwait France Japan UAE Bahrain China Germany UK Netherlands Jordan MalaysiaUSA is by far the largest investor in Saudi Arabia. 7% FDI in Saudi Arabia 2011: 16.4 billion US$
  14. 14. 14  No bureaucracy and one gate to investment “General Authority for Investment Arabia (SAGIA).  100 % land and corporate ownership to foreigners.  No restrictions on the re-transfer of capital.  No taxes on personal income , taxes 20 % of the benefits on foreign companies.  The possibility of loss carry-over to later years rather than factoring them into tax settlements of profitable years.  Foreign investors have the right to benefit from specialized financial institutions (local and international institutions). INVESTMENT INCENTIVES IN SAUDI ARABIA
  15. 15. ADVANTAGES OF INVESTING IN SAUDI ARABIA 15  Liberalized Market  Domestic Market of over 29 Million People  Proximity to big Markets  Low Labor Costs  Major source of energy  Guarantee of Transfers  National Treatment  Reliable Investment Environment
  16. 16. 16  Topped the list of GCC and West Asian countries in terms of direct foreign investment.  Topped the list of Arab host in terms of direct foreign investment, with estimated flows of $ 38.2 billion, up 39% of the total.  Top of the list of Arab host of inter-Arab investment interfaces, with an estimated worth of $ 11.6 billion, up 60.4% of the total.  Major investments in west Asia go to three countries: KSA, Turkey and UAE.  Kingdom concluded 41 bilateral agreements with various worldwide countries, including 17 investment agreements, and 24 avoidance of double taxation agreements. Cont…. ADVANTAGES OF INVESTING IN SAUDI ARABIA
  17. 17. Physical Infrastructure$200 billion Petrochemical Expansions$92 billion Electric Power Generation$90.7 billion Water Desalination$88 billion Telecom and IT$70.7 billion Tourism and Leisure Development$53.5 billion Natural Gas Production$50 billion Agricultural Expansion$28.3 billion Educational and Training$10.7 billion Railways$99 billion PLANNED SAUDI INVESTMENTS UP TO 2020 17
  18. 18. INVESTMENT OPPORTUNITIES IN HOUSING 18  King Abdullah decree to support the Housing Sector through increased allocations totaling $14.67 billion to the General Housing Authority and the Real Estate Development Fund.  The royal decree to support the Housing Authority in building up to 500,000 housing units for citizens.  King’s initiative will bring down the existing shortage of housing units from 1.2 million to 700,000.  The decision to increase the real estate loan from SR300,000 ($80 thousand) to SR500,000 ($133 thousand) and build as many as 500,000 housing units, was reflected in the market with a boost in demand for plots of land for building houses and increased activities in the real estate market.
  19. 19. 19  Saudi Arabia is planning to invest heavily in its railway infrastructure, with about SR 365 billion ($99.4 billion), by the year 2040.  Riyadh Metro line: • Saudi Arabia awarded more than $22 billion in contracts to develop a metro line in Riyadh.. • It is the biggest infrastructure project to be undertaken in the Kingdom of Saudi Arabia, and is a cornerstone of the bold future for Riyadh city. • Six lines will serve the capital city’s center, government facilities, universities, commercial areas, the airport and the financial district. • Construction of the 175-kilometer (109-mile), and 85-station network will be the longest metro line in the world under construction, and will create 15,000 jobs over five years. INVESTMENT OPPORTUNITIES IN METRO &RAILWAYS
  20. 20. INVESTMENT OPPORTUNITIES IN METRO &RAILWAYS 20  North-South railway: • Is considers the largest freight rail project, 2,750 km long, and valued at an estimated SR 37.87 billion ($10.1 billion). • The project is of strategic importance in terms of freight exports to the Gulf.  Land bridge project: • Is another important freight line valued at SR 26.6 billion ($7.1 billion). • The line links the port cities of Jeddah, Dammam and Jubail, passing through Riyadh.  Haramain High Speed rail project: • Is valued at SR 42 billion ($11.2 billion) and built to transport pilgrims.  Jeddah metro: • Is another planned project valued at SR 35 billion ($9.3).billion). Cont….
  21. 21. 21 FOREIGN TRADE OF SAUDI ARABIA
  22. 22. DEVELOPMENT OF SAUDI ARABIA’S FOREIGN TRADE 22 0 100 200 300 400 500 600 2007 2008 2009 2010 2011 2012 233 313 192 251 365 388 90 115 95 107 132 156 323 428 287 358 497 544 Billion Dollars EXPORTS IMPORTS TRADE VOLUME Today, Saudi Arabia is the 10th biggest exporter and the 21st largest importer in the world. (excluding intra-EU (27) trade).
  23. 23. 23 TO (10) FOREIGN TRADE PARTNERS -2012 SAUDI ARABIA EXPORTS TO  USA 14%  Japan 13%  China 13%  S . Korea 9.2%  India 8.3%  Singapore 3.6%  Taiwan 3.4%  Italy 2.7%  Bahrain 2.7%  U.A.E 2.6% SAUDI ARABIA IMPORTS FROM  USA 13.5%  China 12.7%  Germany 7%  Japan 6.7%  S. Korea 6%  U.A.E 4.1%  India 3.3%  France 3.2%  Italy 3%  UKs 2.5%
  24. 24. MAIN EXPORTS OF SAUDI ARABIA 24  Petrochemical Products  Electric Power Towers (High Tension)  Paper Industries  Medicine  Prefab. Steel Structure Buildings  Air Conditioning Materials  Cleaning Materials  Plastic Textiles  Insulating Materials  Plastic pipes and fittings and bottles  Miscellaneous Plastic Material  Electric Cables  Irrigation Industries  Electric Poles  Steel Angles for Electric Power Towers  Transparent Glass  Carpets  Cement  Foodstuff  Copper Wire , bars and jewelry
  25. 25. SECTORAL BREAKDOWN OF SAUDI’S IMPORTS -2012 25 14% 12% 3% 14% 26% 31% Food stuffs Chemical products Textiles& Textiles Articles Base metals Electrical machines Others Machines appliances &electrical gadgets have the highest imports value during 2012 at rate of 26% of the total imports value of Saudi Arabia.
  26. 26. ADVANTAGES OF SAUDI’S EXPORTED PRODUCTS 26  More than 2000 commodity within 17 groups.  Applying International Standard & Specification .  Accessibility to more than 148 International Markets.  High Quality of Packaging .  Suitable & competitive price .  Financing programs.  Ease of Transport.  Air, sea & land cargo from various ports.
  27. 27. SAUDI ESTIMATED BUDGET - 2014  Expenditure $228 Billion 8% 7% 25% 13% 10% SECTORAL BREAKDOWN OF EXPENDITURE )%( Transport & Communications Water, Agriculture, Industry Education Health & Social Development Development Funds 27  Revenues $228 Billion
  28. 28. REFORMS TO ENHANCE SAUDI’S ECONOMY 28  Re-evaluation and issuance of new laws.  Developing IT and Communication platforms.  Attention to sectors in which Saudi Arabia has comparative and competitive advantages.  Creating more jobs for Saud youth.  Enhance PPP Private / Public partnership.  Accelerating Privatization Program.  Support SME’s and Family Business.  Promotion of Non-Oil Export .
  29. 29. 29 TOWARDS BETTER UK–SAUDI RELATIONS
  30. 30. 30 20122011201020092008 20401528923697950Exports to UK 41923817344234244060Imports from UK 62325345436541215010Trade volume - 2152- 2289- 2519- 2727- 3110Balance of trade DEVELOPMENT OF KSA’S FOREIGN TRADE WITH UK (BILLION US $)
  31. 31. Come and Share our Future with us. Thank you . . . www.csc.org.sa Email: cit@csc.org.sa 31

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