Saudi Arabia is experiencing significant shifts in its economic structure as 2024 approaches, marked by notable changes within both the petroleum and non-petroleum sectors. Recent data from the General Authority for Statistics reveals encouraging growth among non-oil exports, juxtaposed against declining oil revenues, reflecting adjustments within the Kingdom's economic framework.
According to reports, non-oil exports surged by 18.1% year-on-year in December 2024, demonstrating strong growth as the country boosts its economic diversification efforts. This increase includes re-export activities, with total non-oil exports—excluding re-exports—reaching values of approximately 20.4 billion Saudi Riyals, posting a 15.9% rise compared to the same month the previous year.
Highlighting the specifics, re-exports alone skyrocketed by 23.4%, amounting to 9.05 billion Riyals, showcasing improved commercial activity and momentum within the Kingdom’s trading arenas. Such growth is welcomed; it aligns with Saudi Arabia's Vision 2030 strategy to reduce dependence on oil revenue by emphasizing non-oil industries.
Conversely, the kingdom saw its oil exports dip sharply by 10% during the same period, which substantially impacted the overall trade balance. Petroleum exports comprised only 68.8% of total exports as of December 2024, down from 74.3% the previous year, marking a significant structural shift. This influence is illustrated by total exported goods dropping by 2.8%, as petroleum exports fell to 64.8 billion Riyals.
The decline in oil exports is raising questions about the sustainability of the economy, particularly as profit margins from oil have been adversely affected by global market conditions. This downturn has underlined the importance of diversifying revenue streams, especially when facing fluctuated oil prices, which are subject to geopolitical tensions and shifting demand.
The increase in imports, rising 27.1% to reach 79.04 billion Riyals, compounds the challenges facing the trade balance. This situation has pushed the trade surplus down by 56.1%, now standing at just 15.26 billion Riyals compared to the same month last year. The growth of imports signals heightened local demand for foreign products, which runs parallel to the declining oil revenue.
Analyzing the complete fourth-quarter data of 2024, the non-oil export segment showed promising growth, increasing by 17.3% compared to the same quarter of 2023. National non-oil exports (excluding re-exports) grew by 8.2%, but overall exported goods slightly fell by 6.1%, with oil exports seeing the most decline at 13.3%.
Falling figures for petroleum exports from 76.4% of the total for Q4 2023 to 70.5% for Q4 2024 indicate substantial changes as the country grapples with energizing other parts of its economy. The fluctuations associated with oil prices add layers of complexity to Riyadh's financial strategy, amplifying the need for resilience.
With imports continuing to climb—growing by 15.5% during the last quarter—officials express concerns about the repercussions these figures may have on the national balance of trade as they relate to the overall economic climate. The changing tide highlights the urgency of enacting efficient policies to counterbalance these shifts from oil revenues.
Through these figures and reports, it becomes evident how deeply intertwined Saudi Arabia's economic future is with its capability to pivot from its long-standing reliance on oil. By fostering non-oil sectors and improving trade dynamics, the Kingdom stands at the crossroads of its economic transformation. Continued vigilance and responsive policies will be required to navigate the challenges posed by both market dependencies and external pressures on global oil supply.