Saudi Arabia export financing increases, trade deficit widens

Dubai: Credit facilities for Saudi Arabian exporters sees an increase in the first half of 2024 as the country sought to reduce its non-oil trade deficit.

The Saudi Export-Import Bank provided 4.3 billion (Dh15.7 billion) in financing and insurance during this period, marking a 128 per cent rise from the previous year, according to the Saudi Press Agency.

The bank reported that export financing disbursements totalled $1.8 billion (Dh6.6 billion), up 142 per cent year-on-year, while export credit insurance reached $2.4 billion (Dh8.8 billion), an increase of 118 per cent compared to the previous year.

Recent international trade data from the General Authority for Statistics indicated an 8.2 per cent year-on-year rise in non-oil exports, including re-exports, in May. Despite this growth, the ratio of non-oil exports (including re-exports) to imports increased to 41 per cent in May 2024 from 39 per cent in May 2023, reflecting a widening non-oil trade deficit.

Chemical products were the largest non-oil export category, making up 24 per cent of the total and experiencing a 6 per cent increase year-on-year. Plastics and rubber products followed, representing 22 per cent of non-oil exports. China remained the primary destination for Saudi non-oil exports, accounting for 15 per cent of the total, with South Korea and India as the next largest markets at 10 per cent and 8 per cent, respectively.

Conversely, China was also the leading source of imports into Saudi Arabia, constituting 25 per cent of total imports in May 2024, followed by the US at 9 per cent and the UAE at 6.5 per cent.