Weekly Insights 28 Feb 2025: Non-oil exports rise alongside robust monetary indicators & tourism surge

Weekly Insights 28 Feb 2025: Non-oil exports rise alongside robust monetary indicators & tourism surge  

1. Overall deposits in Saudi Arabia grew to a record-high SAR 2.73trn in Jan 2025; govt deposits continued to decline. Credit growth outpaced deposit growth for the 12th month in a row. Residential new mortgages finance stayed above SAR10bn+ for the 3rd consecutive month. Net foreign assets decline further, falling to its lowest since Oct 2023

2. Saudi Arabia’s trade surplus widened to SAR 15.3bn in Dec 2024 (Nov: SAR 13.5bn)

• Saudi Arabia’s overall exports fell by 4.4% yoy to SAR 94.3bn in Dec, due to the 10% drop in oil exports while non-oil exports inched up by 15.9% to SAR 20.4bn and re-exports surged by 23.4% to SAR 9.1bn. Share of oil exports to overall exports slipped to 68.8% (Nov: 70.1%).
• For the full year, non-oil exports grew by an average 4.0% while re-exports surged by an average 45.7%.
• Imports expanded by 2.4% mom and 27.1% yoy to SAR 79.0bn. This resulted in trade surplus widening to SAR 15.3bn from Nov’s SAR 13.5bn. From a year ago, surplus narrowed by more than half.
• In Dec, South Korea and Japan were the top destination for oil exports, ahead of China. The top 5 nations accounted for 60.5% of total oil exports & top 25 for 98.3% of the total in Dec.
• Saudi Arabia’s non-oil trade with the GCC was led by a 10.8% gain in non-oil exports. UAE was the top destination for non-oil exports.
• UAE was the largest trade partner within the GCC.
• Non-oil trade surplus with UAE more than doubled to SAR 2.16bn in Dec. Though deficits were recorded with Oman, it narrowed in Dec 2024; surpluses with Bahrain & Qatar narrowed while that with Kuwait widened.

3. Qatar trade surplus stayed below QAR 20bn for the 5th straight month in Dec 2024

• Qatar’s foreign trade in 2024 was driven by imports (up by an average 14%) while exports declined in yoy terms for 7 of the 12 months in the year.
• In Dec, exports grew by 6.7% yoy to QAR 31.2bn – this was the highest monthly value since Aug 2023. China was the largest export destination (one-fifth of total exports), followed by South Korea and India; the top 5 destinations accounted for 61.9% of total exports.
• Imports increased by 21.6% to an 11-month high of QAR 12.8bn in Dec. China was the main import partner, and together the top 5 importing nations took a share of 44.1% of total imports.
• Surplus widened to QAR 18.4bn in Dec (Nov: QAR 16.7bn)
• Qatar’s position as a leading LNG exporter is set to expand further: plans are underway to boost export capacity by 85% by 2030.
• The country has signed multi-year deals with many European and Asian nations including with China, France, Germany, Italy & India among others.

4. Gains continue in Middle East air passenger & cargo in Jan 2025, despite conflicts & diversions

• Robust passenger traffic growth continues in 2025, with Asia once again posting the strongest gains. Industry total Revenue Passenger-Kilometer (RPK), including international & domestic routes, grew 10.0% yoy in Jan 2025 (vs international RPK up 12.4%)
• Middle Eastern airlines’ international RPKs grew by 9.6% yoy in Jan – the slowest following North America and Europe’s 3.4% and 8.6% gain. Asia Pacific was the fastest growing region globally for international RPKs (21.8% yoy).
• Middle East-Asia route passenger growth was up by 10.2% yoy in Jan 2025 (Dec: 5.9%); the fastest growing was within Asia (25.4% in Jan)
• Cargo tonne-kms (CTKs) grew by 3.2% yoy in Jan 2025, up for the 18th straight month, with expansions across all regions but Africa and the Middle East. Only Latam posted double-digit growth while Middle East routes to Asia and Europe fell by 7.3% and 3% respectively.

5. Middle East international tourist arrivals rise 32% in 2024 vs 2019: most destinations cross pre-pandemic levels, 4 years after Covid hit

• UNWTO reported that an estimated 1.4bn tourists travelled internationally in 2024 (+11% yoy). The Middle East posted the strongest recovery, rising 32% above pre-pandemic levels (but just 1% yoy).
• Africa and Europe grew by 7% and 1% respectively (vs 2019) while Americas and Asia-Pacific reached 97% & 87% of pre-pandemic levels last year. Europe was supported by intra-regional travel while Asia & the Pacific benefitted from reopening of several markets (including China). Tourist arrivals are expected to grow between 3% to 5% this year.
• Among the best performing destinations in 2024 in terms of international tourist arrivals were Qatar (top, +137% vs 2019), Saudi Arabia (4th, +69%), Morocco (8th highest, +35%) and Egypt (16th, +23%). Visa and travel facilitation measures are expected to benefit the GCC nations (e.g., the recently announced unified GCC tourist visa policy)
• International tourism receipts also recovered to USD 1.6trn in 2024, up 3% yoy and 4% from pre-pandemic levels (in real terms). Kuwait topped the list of best-performing destinations in terms of receipts (+232% compared to 2019) while Saudi Arabia was 3rd best (+148%).

6. What are the main factors weighing on the recovery of international tourism? Higher transport & accommodation costs top the list

• About 64% of UN Tourism Panel of Experts indicate ‘better’ or ‘much better’ prospects for 2025 compared to 2024.
• According to the UNWTO panel of experts survey, the main concerns weighing on tourism recovery are higher transport & accommodation costs (58% of experts mentioned this in Jan 2025 vs 55% a year ago) & other economic factors and geopolitical risks (51% and 31% respectively) – similar to a year ago.
• Extreme weather events increasingly feature among the top 5 worries (28% mentioned in 2025) – it appeared for the first time in the list in Jan 2024!

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