Saudi Arabia’s Non-Oil Exports Surge in October, Boosting Economic Diversification Efforts

Saudi Arabia announced a strong increase in non-oil exports in October, marking a major turning point in its attempts to diversify its economy. The Kingdom’s biggest trading partners are now China and the United Arab Emirates (UAE). This move demonstrates the Kingdom’s will to lessen its dependency on crude oil earnings and to support the lofty objectives outlined in Vision 2030.

The General Authority for Statistics’ most recent report states that outbound shipments to the United Arab Emirates were SR5.86 billion ($1.56 billion), a significant 54.2 percent rise over the same month the previous year. Growing economic links between the two Gulf countries are demonstrated by the UAE’s ranking as the leading destination for Saudi non-oil exports. Mechanical and electrical equipment led the list of exports to the UAE, valued at SR3.11 billion, followed by transport parts worth SR713.5 million and chemical products at SR503.8 million.

China, the second-largest destination for Saudi Arabia’s non-oil exports in October, received shipments worth SR2.35 billion. The export basket to China was dominated by chemical products, valued at SR826.3 million, followed by plastic and rubber goods worth SR795.1 million. Mineral products, valued at SR300.5 million, also contributed to the trade flow.

The strengthening of the non-oil sector is a cornerstone of Saudi Arabia’s Vision 2030, an ambitious economic reform program launched in 2016. The program seeks to lessen the Kingdom’s reliance on oil earnings and diversify its economy. Saudi Arabia’s Minister of Economy and Planning, Faisal Al-Ibrahim, emphasized the noteworthy advancements made in this area during his remarks at the World Economic Conference in Riyadh last month. He noted that the non-oil sector now accounts for 52 percent of the Kingdom’s real gross domestic product (GDP), a notable achievement in the drive towards economic diversification.

Al-Ibrahim further emphasized that non-oil economic activities have been growing at an annual rate of 20 percent since the Vision 2030 reforms began. This rapid growth could be as a result of government efficient diversification policies of the government and the Kingdom’s hardy non-oil sectors.

Boosted more by the recent economic figures, the outlook on the non-oil segment in the Kingdom of Saudi Arabia is getting even rosier. The Purchasing Managers Index (PMI), this is an average of business activity in the non-oil private sector rose to 59.0 in November from a previous of 56.9 in the prior month of October. This shows a clear increasing trend towards a healthier expansion in the non-oil private sector, owing to enhanced demand and overall business conditions.

Currently, an increase in UAE and Chinese non-oil exports demonstrate the vision for economic diversification and presents a strong strategic boost for the Kingdom’s and its international trade relations. The diversification of sheikdom’s economy is expected to continue acquiring momentum with government programs and private sector investments being funneled into it.

Currently, under Vision 2030, Spain boosts international competition, stimulates innovation, and improves competitiveness within the Kingdom. The government’s recent economic performance and efforts to build a supportive environment for business growth favorably support the future success of the Kingdom’s diversified economy.

Thus, the general rise in overall exports particularly the non-oil exports in the UAE and China in October gives implication and support to Vision 2030. It underlines the Kingdom’s pursuit of the process of diversification of economy and the reduction of dependence on the oil sector. As for the Saudi Arabia’s future plans, it seems that the emphasis will be made to promote the development of the non-oil sector as the priority for economic growth.