Saudi Arabia, with a population of 36,408,820, is ranked 40th in the world, just behind Poland. Located in the Middle East, it covers a total area of 2,149,690 square kilometers, ranking 12th globally, just behind the Democratic Republic of Congo.
Saudi Arabia’s economic position in 2022 is strong, with a GDP of $1,108,571,517,285.38, ranking 17th globally. It is behind Indonesia, with a GDP of $1,319,100,220,407.72. The GDP per capita in Saudi Arabia is $30,447.88, ranking 37th globally, behind Cyprus with a GDP per capita of $32,048.24.
Despite facing challenges, Saudi Arabia’s economy remains robust and continues to play a significant role in the global market.
What are the economic activities of Saudi Arabia?
- Primary activities: 2.6% of GDP.
- Secondary activities: 44.2% of GDP.
- Tertiary activities: 53.2% of GDP.
Primary Sector of Saudi Arabia
Saudi Arabia’s primary sector, particularly its agricultural activities, thrives due to its diverse climate and natural resources. With 80.77% of the land dedicated to agriculture, the country produces a variety of crops and animal products. The main agricultural products include milk, dates, chicken, wheat, tomatoes, potatoes, watermelons, olives, eggs, and onions.
Despite agriculture contributing only 2.6% to the GDP, these products play a crucial role in the country’s economy, providing food security and supporting local livelihoods. The sector’s significance lies in its ability to sustain a wide range of crops and livestock, ensuring a steady supply of essential food items for the population.
The country boasts a diverse geological landscape, leading to rich natural resources. Its primary sector thrives on petroleum, natural gas, iron ore, gold, and copper. These resources play a pivotal role in driving the economy and shaping various industries.
Saudi Arabia’s gas production in 2020 reached 117.3 billion m³, securing its position as the 8th largest producer globally.
Secondary Sector of Saudi Arabia
What is the secondary sector or what are secondary activities?
The secondary sector involves industries that transform raw materials from primary activities into finished products for consumption. In Saudi Arabia, the main industrial products include crude oil production, petroleum refining, basic petrochemicals, ammonia, industrial gases, sodium hydroxide, cement, fertilizer, plastics, metals, commercial ship repair, commercial aircraft repair, and construction.
In 2023, Saudi Arabia’s total exports are dominated by oil, making the percentage of manufactured goods relatively low and not a significant contributor to the country’s export revenue.
Tertiary sector of Saudi Arabia
What is the tertiary sector or what are tertiary activities?
The tertiary sector in Saudi Arabia encompasses services that involve offering knowledge and time to enhance productivity and meet needs. Key activities include healthcare, education, banking, communication, tourism, transportation, and security services. These sectors play a vital role in driving the country’s economy and meeting the diverse needs of its population.
Specifically, Tourism is a crucial pillar of Saudi Arabia’s economy, contributing significantly to its GDP. With 20,292,000 annual arrivals and a tourist arrival ratio of 0.5573, popular destinations like Makkah and Medina, which host millions of pilgrims annually, play a vital role in boosting the tourism sector’s growth and economic impact.
Another example of tertiary economic activity is the mobile cellular sector, with 48 million subscriptions, supporting technological growth by enhancing connectivity, fostering innovation, and enabling digital services across the economy.
Military Activities and Economic Sectors of Saudi Arabia
The military is a key example of various economic activities in a country. In Saudi Arabia, the military relies on the primary sector for resource extraction, such as oil, which is vital for military use. The secondary sector includes the manufacturing of military equipment, while the tertiary sector provides essential services. The quaternary sector focuses on military research and development, and the quinary sector involves high-level decision-making and strategy.
In 2023, Saudi Arabia’s military expenditure reached $75,813.3 million, which is 7.4% of its GDP. The active military force consists of 257,000 personnel, resulting in about 7.8 active military members per 1,000 people. This data highlights the significant role of military activities in the country’s economy.
International Trade of Saudi Arabia
Import Activities of Saudi Arabia
Import activities in Saudi Arabia are crucial, accounting for 23.29% of GDP, totaling $25.82 billion in 2023.
Saudi Arabia’s import activities are diverse, with major partners like China, UAE, US, India, and Germany. Import commodities include cars, broadcasting equipment, garments, gold, and refined petroleum.
Exports Activities of Saudi Arabia
Saudi Arabia’s export activities play a crucial role in its economy with exports totaling $445.88 billion in 2023, accounting for 40.22% of its GDP, indicating a high level of importance.
Saudi Arabia primarily exports crude petroleum, refined petroleum, plastics, and fertilizers. Its top export partners include China, India, Japan, South Korea, and the US, with China being the largest at 19%.
Saudi Arabia economy challenges in 2024
Saudi Arabia, a high-income oil-based economy, faces challenges in 2024. Despite being an OPEC leader and diversifying its portfolio, per-capita incomes are declining. The young labor force struggles with human capital gaps, heavy bureaucracy, and corruption. Poverty remains substantial, hindering innovation and economic growth.
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