Saudi Arabia 

Saudi Arabia country policy

Policy established 11 July 2007

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 2000 mln euro
• Early warning signal 1500 mln euro
• - of which was used as at 2010-07-31 140 mln euro

Country class: 2

Restrictions

• Extended DAL (Date of Ascertainment of Loss): 6 months

Saudi Arabia country facts

Atradius DSB Economic Research 

Country Report last updated Nov 3rd, 2009 
Country: SAUDI ARABIA

Political Situation
Stable But Sleeping Security Threats

Head of state
King Abdullah (81, and pro-reform). Uncertainty about next crown prince Prince Sultan (>80, Prime Minister) who is reported to be unwell. No timetable for transfer of power, several names are mentioned.

Form of government
Pro-monarchical, King is also leader of the government. Shura Council is unelected consultative body (no legislative powers); unlikely that elected components will be introduced. Opposition fragmented and weak.

Internal Economic Situation
2009 Recession, 2010 Recovery

General situation
In 2009 0.5% GDP budget deficit coupled to 4,5% inflation and 1% real GDP contraction (positive contribution domestic demand overcompensated by net foreign balance (weak exports)). Increased inflation because of slower domestic growth, global factors, stronger weak USD, lower  commodity prices despite supply bottlenecks and public wage increases. Price subsidies (risk of wage-price spiral). SAMA (central bank) will continue to maintain the riyal’s 1986 (!) peg against the USD (no longer appreciation pressure) and aims to maintain liquidity. Banks in relatively good shape; state deposit guarantee, well capitalised. YTD stock exchange -/- 44%. Interest rate (currently low) will be constantly above those in the US, currently positive real rates. Government domestic debt decreased to 14% GDP (end 2008). Oil revenues count for 40% GDP and > 90% of government income and exports.

External Economic Situation
Weakened In 2009-2010; Dependent On Oil

Main sources of foreign exchange
Oil-exports (90%).

Main foreign markets
USA (18%), EU (16%), Japan (15%), Korea (10%).

Main expenses of foreign exchange
Military goods, capital goods, consumption goods, remittances of non-residents.

Balance of payments 
Performance dependent on oil price and production. In 2009 imports increase less than exports. Gross financing need USD 32 bn: rool on ST debt.