x Abu Dhabi, UAE Thursday 20 July 2017

Saudi export revenues slide 6%

Saudi Arabian export revenues fell almost 6 per cent in March compared with the same period a year ago as the cost of imports surged amid ongoing concerns over inflation in the kingdom.

A Saudi man eats his lunch in a restaurant in Riyadh. Food and beverage prices climbed by 6.4 per cent in the kingdom last month. Hasan Sarbakhshian / AP Photo
A Saudi man eats his lunch in a restaurant in Riyadh. Food and beverage prices climbed by 6.4 per cent in the kingdom last month. Hasan Sarbakhshian / AP Photo

Saudi Arabian export revenues fell almost 6 per cent in March compared with the same period a year ago as the cost of imports surged amid ongoing concerns over inflation in the kingdom.

National Commercial Bank said in its Saudi economic report released on Saturday that the total value of the country's exports slipped to 16.5 billion riyals (Dh16.16bn) versus 17.5bn riyals a year ago.

Volumes fell 11.5 per cent to 3.8 million tonnes from 4.3 million tonnes last year, Arab News reported yesterday.

March imports jumped 12.7 per cent year on year to 51bn riyals as volumes dropped 11.6 per cent to 6 million tonnes - data indicative of the rising cost of imported goods.

But annual inflation rate slowed slightly to 3.8 per cent last month, the lowest this year, from 4 per cent in April because of a fall in the core index, the government's statistics office said yesterday.

"While domestic inflationary pressure is likely to persist as we approach the holiday seasons, we see the current inflationary trend as more of a demand-pull inflation rather than a cost-push inflation caused by recent labour market reform initiatives," said Fahad Al Turki, the head of research at Riyadh-based Jadwa Investment.

The main contributor to the overall easing of inflation rates was a fall in the core index - which excludes food and housing components - to 2.6 per cent last month from 3.4 per cent in April, the government figures showed.

All of the core index's main components - clothing and footwear, transport, and restaurants and hotels - showed a significant drop.

But the growth of food and beverage prices climbed to 6.4 per cent versus 6.2 per cent in April, while rental and housing prices rose to 3.6 per cent from 3.0 per cent.

Saudi's central bank and the IMF both expect inflation to peak at about 4.6 per cent this year before slowing again by next year.

The kingdom's top three trading partners in March were the UAE, China and Singapore, according to the National Commercial Bank report.

Petrochemicals were the top non-oil export category in March at 33.7 per cent, equivalent to 5.5bn riyals in revenue and a 13.4 per cent increase year on year, according to the report.

Plastics and rubber, which make up 29.3 per cent of exports, returned 4.8bn riyals, growing by 4.1 per cent on an annual basis.

Base metal exports jumped almost 50 per cent to 1.3bn riyals.

A quarter of non-oil imports were machinery and electrical equipment, valued at 13.6bn riyals, and the value of transport equipment imported jumped 44 per cent year-on-year to 10.3bn riyals.

The United States remained the largest exporter of goods to Saudi Arabia in March, up by 33.9 per cent to a total value of 7.1bn riyals. China and Germany were next. Non-oil exports account for about 12 per cent of the overall exports of Saudi Arabia, according to the Central Department of Statistics and Information.

Meanwhile, customs officials at Jeddah Islamic Port have doubled handling fees, Arab News reported. The move follows increased congestion at the port, which receives the bulk of imports into the kingdom, as only two gates are open.

 

business@thenational.ae