The fall in oil prices below $60 a barrel this week means Saudi Arabia is under growing pressure to curb spending to keep its budget deficit in check, but there is one bright note for the kingdom’s economic outlook: Non-oil exports are surging. New data showed that in the third quarter, non-oil trade neared 100 billion riyals ($26.7 billion) and it could cross that threshold for the first time in Q4.
A rush of reexports has helped the picture — they now account for around 40% of all non-oil trade, up from 30% last year — as Saudi ports and logistics hubs muscle in to take a greater share of regional commerce.
Domestic industry is also growing, bolstered by an exemption from a levy on foreign workers which was made permanent by the cabinet this week. Since 2019, industrial GDP has risen by 56%. That’s not enough to fully offset the pain of lower oil revenues, though, and Oxford Economics now expects Saudi GDP growth to slow next year.