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BALANCE OF TRADE

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BALANCE OF TRADE IN SAUDI ARABIA

The Kingdom maintained a favorable balance of trade for the period from 1980 to 1994. The Kingdom’s balance of trade has improved noticeably since 1986, when it had a surplus of only SR3.6 billion (U.S.$0.96 billion). During the Gulf Crisis, the Kingdom’s balance of trade recorded a surplus of SR76.2 billion (U.S.$20.3 billion) in 1990 and SR 70.1 billion (U.S.$18.7 billion) in 1991 (see Table 11). This surplus declined to SR63,788.0 million (U.S. $17.0 million) in 1992 and then to SR53,154.1 million (U.S. $14,174.4 million) in 1993. However, the Kingdom’s balance of trade improved during 1994 and recorded a surplus of SR72,167.5 million (U.S. $19,244.7 million).

Due to the fall in the Kingdom's oil export revenues in response to an over supply in the international oil markets, Saudi Arabia has been faced with the problem of a current account deficit since the mid 1980s. The balance of payments’ current account deficit during the period 1986-1989 were SR-43 billion (U.S. $11.5 billion), SR-36.6 billion (U.S. $9.8 billion), SR-27.5 billion (U.S. $7.3 billion), and SR-35.7 billion (U.S. $9.5 billion) respectively.

The Desert Storm war, coming at the start of the fifth development plan (1990-1994), had contradictory effects on the Kingdom’s foreign trade and balance of payments. The sharp increase in the value of oil exports at the start of the fifth plan period resulted in an average annual trade balance surplus of SR75.1 billion (about U.S. $20.00 billion) during the period from 1990 to 1993 (see table 11). On the other hand, The substantial cost of the war and the immense outflow of related payments had a substantial negative impact on the overall balance of payments' position. Thus, as table (15) shows, the average annual current account deficits during the years 1990 to 1993 were SR15,6 billion (U.S. $4.2 billion), SR103.3 billion (U.S.27.5 billion), SR78.1 billion (U.S. $20.8 billion) and SR54.7 billion (U.S. $14.6 billion) respectively.

TABLE 15
BALANCE OF PAYMENT
1410/1411 - 1413/1414 H. (1990-1993)
(In Millions of Saudi Riyals)

Source: Saudi Arabian Monetary Agency/Economic research and statistics.

(a) Including official transfers and contribution or capital subscriptions to international or regional development agencies and certain government imports.

(b) Including short-term private capital, valuation adjustment, net errors and omissions and changes in commercial banks, net foreign assets, and official capital and reserves.

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 Sources: The Commercial office, Embassy of Saudi Arabia, Washington, D.C. and The Foreign Trade Statistics, Ministry of Finance and National Economy, Central Department of Statistics, Kingdom of Saudi Arabia.