Saudi exports face 30% drop in 2009

Riyadh: Saudi Arabia's non-oil exports could fall by 30 per cent next year in the light of the global financial crisis, a top official said.

"There could be a sharp decline in the exports of petrochemicals, cement and iron in 2009," Dr Abdul Rahman Al Zamil, chairman of the board of directors of Saudi Arabia's Export Development Centre, said. The volume of non-oil exports rose 21 per cent during the current year comparing with the last year. There had been a remarkable growth in the exports of non-oil products over the past couple of years and their volume soared to 106.8 billion riyals (Dh104.58 billion) during the year 2007 compared with 24 billion riyals in 2000," he said.

Economic fundamentals

Meanwhile, latest report of the Riyadh-based Jadwa Investment showed that Saudi Arabia's economy was heading for a slowdown. The economy is forecast to contract by 325 billion riyals next year.

"We have revised our economic growth forecast for 2008 down to 5.7 per cent and slashed our 2009 projection to 1.5 per cent. Real GDP growth next year will be the lowest since 2002 and in nominal terms the economy will shrink by 17.4 per cent, the first annual decline since 2001," Brad Bourland, chief economist at Jadwa, said in its monthly bulletin for December.

Saudi Arabia is well-positioned to weather the extreme economic and financial conditions despite the global meltdown.

"The underlying economic fundamentals of the Kingdom remain strong," the report pointed out.

The slowdown next year will be most noticeable in the oil sector. Average output is expected to be 7.1 per cent lower in 2009 than in 2008.