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Saudi Arabia Saudi Arabia

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Saudi Arabia

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EconomicPoliticalStructural

Saudi Arabia – Quick View
ECR score65.12 (Mar 2011)
ECR rank38 (Mar 2011)
Economic
GDP (2010)USD 433.14 billion
GNI per capita PPP (2009)USD 17,700
FDI inflow (2009)USD 35.5 billion
Inflation (2010)5.5%
Central bank assets (Q3 2010)USD 710,849.38 million
Unemployment rate (2009)5.4%
Government surplus 2010USD 69.45 billion
Political
Government typeMonarchy
Recent political crisisNA
Economic freedom score54th
Freedom of information score157th
Corruption perception index50th
Structural
Crude birth rate (2009)23.7
Population balanceLess than 15 years – 31.97%
Population balance15-64 years – 65.22%
Population balanceAbove 65 years – 2.81%
Life expectancy yearsMale – 72.5 years
Life expectancy yearsFemale – 74.7 years
Mortality rate ('000)38.1%
Literacy Rate (15 – 24 years)97.3%
Internet access41%

[Top] Economic Overview

 

The economy of Saudi Arabia is largely dependent on the oil reserves in the country. The country derives 75% of its revenues from the petroleum sector.

(Source: opec.org)

Gross domestic product (GDP)

Estimated GDP at current prices for the year 2010 is SAR 1,626.97 billion, an increase of 15.46% over 2009.

In 2009, the GDP at current prices was SAR 1409.1 billion, a decrease of 21.10% over 2008. Oil sector is the major contributor to the country’s GDP. The oil sector accounted for 28.1% of the GDP in 2009 as compared to 30.3% in 2008.



(Source: Saudi Arabian Monetary Agencyimf.org)

GDP growth rate

Estimated growth rate of real GDP for the year 2010 is 3.42% as compared to the 0.6% in 2009.

(Source: Ministry of Economy and Planningimf.org)

Gross national income (GNI) per capita

GNI per capita at PPP of the country in 2010 was recorded at USD 24,726.

(Source: UNDP)

Tax structure

In Saudi Arabia, all Saudi citizens and Saudi companies pay a religious tax called zakat. It is charged at 2.5% annually on profits and on the assessable income of individuals. Taxes are collected by the Department of Zakat and Income Tax (DZIT).

Tax on individuals

The tax rate on non-Saudi residents is 20% of the tax base.

The following non-Saudi individuals are subject to tax:

  • A resident who does business in the Kingdom
  • A partner in a resident partnership personal company
  • A general partner in a resident company limited by shares

(Source: Department of Zakat and Income Tax)

Corporate tax rate

The corporate tax rate of a resident capital company is 20% of its tax base.

Companies subjected to tax:

a. A resident capital company on non-Saudi shares. Investment funds are considered capital companies.

b. Total shares in net profits of non-Saudi limited partners in limited partnerships.

(Source: Department of Zakat and Income Tax)

Inflation rate

In Saudi Arabia, Consumer Price Index (CPI) is the official inflation indicator. Inflation rate increased to 5.5% in 2010 from 5.1% in 2009.

(Source: Saudi Arabian Monetary Agency - Pdf)

Foreign direct investment

The FDI inflow in 2009 amounted to USD 35.5 billion, a decrease of 7% from 2008. Net FDI stock value increased to USD 147.1 billion in 2009.

 

 

(Source: saudincc.org.sa)

The major countries that invested in Saudi Arabia in 2009 include:

  • USA: USD 5.8 billion
  • Kuwait: USD 4.3 billion
  • UAE: USD 3.8 billion
  • France: USD 2.6 billion
  • Japan: USD 2.0 billion

FDI inflow in the country (USD million)

 

2009

2008

2007

2006

Total FDI Inflow

35,514

38,151

22,821

17,140

FDI from North and South America

6,048

5,396

4,030

1,589

FDI from Europe

8,417

9,100

4,626

5,734

FDI from Asia

16,495

20,055

9,886

7,032

FDI from Africa

443

525

114

11

FDI from Australia

172

145

25

8

Other Projects

3,938

2,930

4,140

2,766

(Source: saudincc.org.sa)

Banking Sector Assets

Total banking sector assets in the country including both net foreign assets and bank claims amounted to SAR 2,670,089 million in the third quarter of 2010.

 

Q3 2010

Q2 2010

Q1 2010

2009

2008

2007

Foreign Assets

1,695,942

1,672,318

1,659,795

1,631,277

1,683,832

1,170,965

Bank Claims on Private Sector

773,171

760,354

745,758

734,237

734,557

577,882

Bank Claims on Government

167,038

166,796

182,787

154,188

209,920

144,179

Bank Claims on Nonfinancial Public Sector Enterprises

33,938

31,255

29,890

28,136

32,065

37,434

Total

2,670,089

2,630,723

2,618,230

2,547,838

2,660,375

1,930,460

 


[Top] Financial Indicators & Government Financial

Cost of Living Index

The Cost of Living Index recorded in the third quarter of 2010 was 130.2 as compared to 122.8 in the corresponding period of 2009.

 

Period

Q3 2010

Q2 2010

Q1 2010

Q4 2009

Q3 2009

Q2 2009

Q1 2009

Cost of Living Index

130.2

127.7

126.1

124.7

122.8

121.3

120.7

(Source: Saudi Arabian Monetary Agency)

Saudi Arabia Cost of living index

(Source: Saudi Arabian Monetary Agency)

Wholesale Price Index

Wholesale price index in the third quarter of 2010 was registered at 147.3 points, an increase of 4.25% as compared to the corresponding period in 2009.

 

Period

Q3 2010

Q2 2010

Q1 2010

Q4 2009

Q3 2009

Q2 2009

Q1 2009

Wholesale Price Index

147.3

145.8

143

142.3

141.3

139.2

138.4

 
Saudi Arabia Wholesale price index

(Source: Central Department of Statistics and Information,Saudi Arabian Monetary Agency)

Interest rates

The interest rate on domestic currency deposits in 2009 for 3 months was 0.6% as compared to 2.9% in 2008. The interest rates in 2009 were reduced to deflect a slowdown in economic growth as a result of global financial crisis.

In Q3 2010,

·         The official repo rate was 2.0% and has been constant since 2009

·         The reverse repo rate was 0.250% and has been constant since Q2 2009

·         The Saudi interbank rate was 0.722%

Average Period

ORR

RRR

Monthly average

3M SIBOR

Treasury Bills

1 week

4 weeks

13 weeks

26 weeks

52 weeks

2010 Q3

2.0

0.25

0.72

0.14

0.74

0.36

0.44

0.54

2010 Q2

2.0

0.25

0.73

0.13

0.18

0.34

0.42

0.52

2010 Q1

2.0

0.25

0.76

0.14

0.19

0.40

0.51

0.68

2009

2.5

1.5

0.91

0.22

0.29

0.46

0.58

0.76

2008

2.5

1.5

3.29

2.52

2.96

3.19

3.38

3.55

2007

5.5

4.0

4.91

4.75

4.76

4.80

4.83

4.85

 
(Source: Saudi Arabian Monetary Agency)

Money supply (currency in circulation)

Money supply in Saudi Arabia includes the components – M1, M2 and M3.

M1 includes currency outside banks and demand deposits.

M2 consists of M1 along with time and saving deposits.

M3 refers to M1 and M2 along with other quasi monetary deposits. Other Quasi deposits comprises of residents foreign currency deposits, marginal deposits for LC’s, outstanding remittances and banks repo transactions with private parties.

Money supply  (SAR million)

 

M1

M2

M3

Q3 2010

591,279

889.453

1,050,936

Q2 2010

576,928

880,975

1,035,582

Q1 2010

542,010

855,717

1,010,511

2009

521,558

844,935

1,028,944

2008

425,494

793,118

929,125

2007

383,557

666,616

789,755

2006

312,742

538,769

660,583

2005

283,539

448,805

553,675

(Source: Saudi Arabian Monetary Agency)

Government expenditure

The spending by the Saudi government increased by 5.12% from 2009 to 2010 and is expected to decrease by 7.42% for the year 2011.

Saudi Arabia Government expenditure

 

Exchange rate

The exchange rate of US dollar against Saudi Riyal in Q3 of 2010 was recorded as 3.75. This rate has been constant since 2005.

Exchange rates of foreign currencies against SAR

 

Q3 2010

Q2 2010

Q1 2010

2009

2008

2007

2006

2005

US Dollar

3.7500

3.7500

3.7500

3.7500

3.7500

3.7500

3.7500

3.7500

Euro

5.1180

4.6016

5.0546

5.4022

5.218

5.5095

4.9388

4.4239

 

Government finances

Total revenue

The actual governmental revenue in 2010 was recorded to be SAR 735 billion, an increase of 44.17% from 2009. The estimated revenue for year 2011 is SAR 540 billion. The revenues from oil sector in 2009 accounted for SAR 434,420 million, a decrease of 55.8% from 2008 oil revenues of SAR 983,369 million.

Saudi Arabia Government revenue

 

(Source: Saudi Arabian Monetary Agency, Ministry of Finance)

Current surplus/deficit

According to preliminary estimates, the current account is estimated to be a surplus of SAR 260.9 billion in 2010 as compared to SAR 78.6 billion in 2009.

(Source: Ministry of Finance)

Aid to developing countries

Saudi Arabia provides loans and aids to the developing countries. From 1991 to 2009, total aid and loans disbursed amounted to SAR 117.6 billion. The contribution to associations and organisations amounted to SAR 10.8 billion and aids provided through multilateral grants amounted to SAR 7.4 billion.
Saudi Arabia Total aid, 2005-2009

(Source: Saudi Arabian Monetary Agency)

Balance of Payments

Since 2000, the current account surplus has prevailed in the country. In 2009, the current account surplus was recorded as SAR 78579.8 billion, a decrease of 84.16% from 2008.

Saudi Arabia Balance of Payments (SAR million)

Year

Trade in goods and services

Total income

Current transfers

Capital and Financial account

Current balance

Q1 2010 E

92,725.0

10,171.8

-29,762.7

-36,334.7

73,134.1

2009

149,953.5

32,398.5

-103,772.2

149,248.5

78,579.8

2008

548,134.1

34,368.3

-82,694.1

-383,610.9

496,208.3

2007

389,884.8

23,970.1

-63,869.5

-291,446.0

349,985.3

2006

419,484.4

14,361.8

-62,843.5

-294,003.1

371,002.7

 

[Top] Labour Force and Employment Overview

 

In 2009, the total labour force in Saudi Arabia was 8.61 million. Males constitute 85.1% of the total labour force and female workers account for 14.9%.

In 2009, non-Saudis accounted for 52.9% of the total employed population. Of the total employed population in 2009, 86.8% were males and 13.2% were females.

Labour Force (2009)

 

Employed

Unemployed

Nationality

Males

Females

Total

Males

Females

Total

Saudis

3,332,628

505,340

3,837,968

248,162

200,385

448,547

Non-Saudis

3,736,810

573,214

4,310,024

10,380

4,082

14,462

Total

7,069,438

1,078,554

8,147,992

258,542

204,467

463,009

(Source: Saudi Arabian Monetary Agency)

Labour force by economic activity

In 2009, the building and construction sector accounted for 41.7% of the total number of workers, followed by wholesale and retail trade sector with 22.6 %.

(Source: Saudi Arabian Monetary Agency)

Unemployment

The unemployment rate is estimated at 10% in 2010. The total unemployment rate in 2009 was 5.4%, however, the unemployment rate of Saudis in the same period was 10.5%. The unemployment rate was higher for Saudi females at 28.4%, whereas the male unemployment for male Saudis was 6.9%.

 

(Source: Saudi Arabian Monetary Agencyameinfo.com)

Minimum Wage

In 2009, the average monthly wage of Saudi Arabians was SAR 990.5, a decrease of 21.26% from 2008.

Period

Males

Females

Total

2009

977.2

1,656.5

990.5

2008

1,340.9

1,880.6

1,353.3

(Source: Saudi Arabian Monetary Agency)

Level of Unionisation

Trade unions are illegal in Saudi Arabia. Employees attempting to form unions can be dismissed, imprisoned or deported in case of migrants. However, a workers’ committee can be formed in companies with the approval of the government.

(Source: ITUC)


[Top] Political Stability

Saudi Arabia follows a monarchy system of government. The power of ruling is hereditary within the Al Saud family in accordance with the holy Qur'an and the prophet's Sunnah. Political parties are banned in the country.

Shura council

The Shura council consists of 150 members and a speaker chosen by the King from amongst scholars, and individuals with knowledge and expertise. The members are chosen for a four year term.

Council of Ministers

The King is the head of the government and commander in chief of the military. A crown prince, appointed by the King, assists the King with his duties. The prince is also the successor to the throne. The council of ministers or the cabinet supports the King in matters related to governance. The cabinet consists of 22 government ministries that specialise in different activities such as foreign affairs, education and finance.

The legislative body called the Consultative Council or Majlis Al-Shura advises the King on matters regarding new legislation and amending existing laws.

(Source: saudi.gov, ITUC)

Regulatory environment

The economic freedom in Saudi Arabia is constrained by inadequate levels of monetary freedom, investment freedom, and property rights.  The legal system is under the political influence. The country scores 66.2 on the 2011 Index of Economic Freedom, making it the 54th freest economy in 2011.

Saudi Arabia Economic Freedom Indices

 

(Source: heritage.org)

Corruption perception

 

New Zealand ranks at 50th position on the World’s Corruption Perception Index (CPI). CPI measures the perceived level of public-sector corruption in 180 countries and territories around the world.

(Source: transparency.org)

Freedom of information

The media operates under the control of the government. Media is not allowed to criticise the government and the Royal family. Internet sites on political, social or religious issues are also blocked in the country. 

World Press Freedom Index 2010 ranks Saudi Arabia at the 157th position with a score of 61.5. The country’s ranking improved from 2009, when it was ranked 163rd out of 175 countries. The country’s ranking indicates that media in the country is under the influence of the government.

Al-Watan, Al-Riyadh, Okaz, Al-Jazirah, Al-Sharq al-Awsat, Arab News, Saudi Gazette are few of the major newspapers in the country.

(Source: rsf.org, BBC)

Judicial system

The judicial system in Saudi Arabia is based on Sharia or Islamic Law. The Sharia courts look after the jurisdiction over general and residual cases. There are four levels of Sharia courts:

·         Criminal courts

·         General courts

·         Court of Cassation

·         Supreme Judicial Council

The Supreme Judicial Council is an eleven member council and supervises the lower courts. The Council provides legal opinions, advises the King and reviews sentences involving death, amputation, or stoning.

(Source: Ministry of Justice)

[Top] Demographic Overview

no data

[Top] Soft Infrastructure

 

Education

The literacy rate for population aged above 15 years of age in 2008 was estimated at 85.5%, the literacy rate for males was 89.5% and 80.2% for females. The literacy rate for youth in the age group 15 – 24 years was 97.3% in 2008, 98.4% for males and 96.2% for females.

(Source: UNESCO)

In Saudi Arabia the education system has three levels

  • Preschool Level
  • Elementary, Intermediate & Secondary Level
  • Higher Education Level

The Preschool level education includes kindergartens and nursery schools before the age of six. The Elementary, Intermediate & Secondary level is compulsory for all citizens and the duration is six years for primary school, and three years each of intermediate and high school. The Higher Education level comprises of university and college study levels.

The Ministry of Higher Education supervises the higher education institutions and sublevels.

In 2009, the total number of students at primary, intermediate and secondary levels was recorded at 6.1 million.

(Source: Ministry of Higher EducationSaudi Arabian Monetary Agency)

Education resources

As of 2009, the country had a total of 26,268 schools. The number of technological colleges and industrial vocational institutes registered in the same year were 35 and 62 respectively.

Healthcare resources

Health resource Indicators at the end of 2008 are given below:

Health Indicators

Per 10,000 Population

Physicians

21.5

Dentist

2.8

Pharmacist

6.4

Nurses

40.8

Allied health personnel

20.8

Hospital beds

21.72

Health Centres

0.8

Governmental hospital beds rate

17.14

Private hospital beds rate

4.58

(Source: Ministry of Health)

At the end of 2009, the government had provided loans worth SAR 7.2 billion to support private education and health services in the country.

(Source: Saudi Arabia Monetary Agency)


[Top] Hard Infrastructure

 

Mass public transit

The mass public transport in the country includes roads (buses and cabs) and railways.

 

 

(Source: Saudi Arabian Monetary Agency)

Roadways

The total length of the road network in Saudi Arabia at the end of 2009 was about 55,000 kilometres.

 

Cumulative length of roads (at end of 2009)

Main roads

14,956

Secondary roads

9,472

Feeder roads

30,547

Total asphalted

roads

54,975

(Source: Saudi Arabian Monetary Agency)

Ports

The country has eight ports. The ports of Jubail and Yanbu are the busiest ports in the country.

(Source: Ministry of Transportation)

Air transport

The air transport carries the highest number of passengers in the country. Through International airports there was arrival and departure of 28.7 million people.

Airports

 

Saudi Arabia has more than 40 airports. International airports in the country are located at Dammam, Jeddah, Riyadh and Madinah. Other airports including regional and domestic airports include:

Town

Airport name

Runway length

Abha

Abha

10900 ft

Al Ahsa

Al Ahsa

10000 ft

Al Baha

Al Baha

10900 ft

Al Jouf

Al Jouf

12000 ft

Al Kharj

Prince Sultan Ab

13100 ft

Arar

Arar

10000 ft

Bisha

Bisha

10000 ft

Dammam

King Fahd Intl

13100 ft

Dhahran

Dhahran Intl

12000 ft

Guriat

Guriat

10000 ft

Hail

Hail

10800 ft

Jazan

Jazan

10000 ft

Jeddah

King Abdulaziz Intl

12400 ft

Jubail

Jubail

13100 ft

Khamis Mushait

King Khalid Ab

12400 ft

King Khalid Military City

King Khalid Military City

12000 ft

Madinah

Pr Mohammad Bin Abdulaziz Intl

12600 ft

Nejran

Nejran

10000 ft

Ras Al Mishab

Ras Al Mishab

10600 ft

Riyadh

King Khaled Intl

13700 ft

Riyadh

Riyadh Ab

13200 ft

Sharurah

Sharurah

11900 ft

Shaybah

Shaybah

10000 ft

Tabuk

Tabuk

10900 ft

Taif

Taif

12200 ft

Turaif

Turaif

9800 ft

Wadi Al Dawasir

Wadi Al Dawasir

10000 ft

Wejh

Wejh

10000 ft

Yenbo

Yenbo

10500 ft

(Source: aircraft-charter-world)

Telecommunications networks

 

The total number of internet users in the country at the end of the third quarter of 2010 was 11.2 million as compared to 10.3 million at the end of 2009. The internet penetration was 41% of the total population in the country.

 

 

(Source:Ministry of Communications and Information Technology)

At the end of the first three quarters of 2010, the total broadband subscriptions in the country were 3.2 million. The broadband penetration was 12.2% of the country’s population.

The number of fixed telephone lines at the end of the third quarter of 2010 was 4.3 million. A majority of the fixed lines, about 3.2 million were residential subscribers. Mobile subscriptions at the end of the third quarter were recorded at 49 million. Of the total subscriptions, 86% were prepaid connections.


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