Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Saudi Arabia’s Vision 2030 economic diversification initiatives are generating opportunities for U.S. companies across industry sectors.
Saudi Arabia’s evolution from the Bedouin kingdom it was when President Roosevelt and King Abdul Aziz met aboard the U.S.S. Quincy 77 years ago to the vibrant G20 economy and important U.S. defense and trade partner it is today is truly remarkable.
Today, the $54 billion U.S.-Saudi Arabia trade and investment relationship creates thousands of jobs in both our countries. In 2020, U.S. goods exports to Saudi Arabia exceeded $10.9 billion and U.S. imports were just over $9 billion according to the U.S. Census Bureau. U.S. services exports were $10.3 billion, and imports were $1.2 billion. According to the Commerce Department’s Bureau of Economic Analysis, U.S. foreign direct investment (FDI) in Saudi Arabia increased from $11,117 million in 2019 to $11,386 million in 2020. For the same period, Saudi Arabia’s FDI in the United States decreased from $7,273 million to $6,262 million. Saudi Arabia is the largest country in the Gulf region with a population of over 35 million, and the largest economy in the Arab World with a GDP of $832.4 billion as of December 31, 2021. Saudi Arabia’s economy continued to rebound in 2021 with the International Monetary Fund (IMF) reporting the Kingdom’s real GDP growth at 4.8 percent and the Saudi Arabian Government projecting a budget surplus of 2.5 percent of GDP. The Kingdom has significant foreign reserves of approximately $450 billion, its sovereign wealth fund, the Public Investment Fund, has over $400 billion in assets, and it has relatively low levels of debt with a 25.9 percent debt-to-GDP ratio at the end of 2021.
The Saudi Arabian Government exercises control over the main economic activities of the country’s oil-based economy. Saudi Arabia has almost 17 percent of the world’s proven petroleum reserves, plays a principal role in OPEC, is one of the world’s largest producers and exporters of crude oil, and is a large-scale oil refiner and producer of natural gas. According to the U.S. Department of Energy’s U.S. Energy Information Administration, petroleum exports accounted for nearly 70 percent of the country’s total exports in terms of value in 2020, and about 53 percent of the Saudi government’s revenues were oil-based.
Saudi Arabia’s Vision 2030 economic diversification initiative, launched in 2016, aims to reduce its dependence on oil and to develop service sectors. Vision 2030 political, institutional, and financial reforms coupled with significant investment by Saudi Arabia’s Public Investment Fund are generating opportunities for foreign companies across industry sectors including renewable energy, transportation, healthcare, advanced technology, and aerospace as well as across a series of giga-projects including the $500 billion NEOM cognitive and smart city development in northwestern Saudi Arabia, the Qiddiya entertainment and sports megaproject in Riyadh, and The Red Sea Project – a sustainable luxury tourist destination.