Economic trends
The Saudi Arabian economy is entirely based on oil. The country has the largest oil reserves in the World and is also the World's biggest oil producer and exporter. Oil accounts for more than 90% of the country's exports and nearly 75% of government revenues. The country's economic growth remained positive in 2009 despite the drop in oil prices. The big construction works policy led by the government as well as direct foreign investments and the solidity of the banking and financial system have allowed this country to become the first economy in the region and one of the major ones in the world. Inflation, which had reached a record 10% in 2008, mainly due to the increase in the prices of food products has decreased. The government wants to reduce the kingdom's dependence on the oil sector by diversifying its economic activities and in developing mainly the agricultural, food, and industry sectors. Private investments are supported by generous government financing and incentive plans. The country's unemployment is estimated at around 12%. The standard of living is one of the highest in the region with USD 15,352 GDP/inhabitant. Tourism generates highly significant revenues (nearly 4 million tourists per year), exclusively on account of the pilgrimage to Mecca.
Main branches of industry
Agriculture accounts for 3% of the GDP and employs 12% of the active population. It is not a very productive sector despite the huge state investments. Saudi Arabia imports most of its agricultural and food product requirements because of the geographical and climatic contraints.
The industrial sector represents two thirds of the GDP. It is dominated by non-manufacturing activities (oil drilling). The industrial sector portion, other than oil, is growing due to Saudi state investments, to diversify the economy. The manufacturing sector only accounts for about a tenth of the GNP.
Lastly, services represent 22% of the GDP. This sector is mainly dominated by tourism, financial and insurance services and the banking sector.
International trade
The foreign trade share in Saudi Arabia is nearly 90% of the GDP. Saudi Arabia's main export partners are the United States and the Southeast Asian countries. The country exports mainly crude oil, plastics and organic chemicals. The main import partners are the United States, Southeast Asian countries and the European Union. Saudi Arabia mainly imports vehicles, machinery, electrical equipment, iron & steel and food products.
In order to promote international trade, attract foreign investment and diversify the non-oil sectors, the government has announced plans to establish four "economic cities" in different regions of the country.
Saudi Arabia recorded a highly significant trade surplus in 2008. Despite the falling oil prices, the country should show a positive balance in the forthcoming years.
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