Saudi Arabia will be a key driver of global trade growth with its exports projected to expand at an average annual rate of more than 7 per cent to $354 billion by 2030 as the country diversifies its economy away from oil, Standard Chartered said in a report on Tuesday.
Metals and minerals, plastic and rubber, chemicals and pharmaceuticals will dominate the kingdom's exports over the next decade, with India, China and South Korea being the principal export markets, Standard Chartered said.
“In Saudi Arabia, diversification of export sectors away from oil will be the key driver of its trade performance in the next decade,” said Yazaid Al Salloom, chief executive of Standard Chartered Bank Saudi Arabia.
“There is a high-potential opportunity for cross-border growth, particularly in India, China and South Korea, which are predicted to be the key trade corridors for the nation.”
Saudi Arabia, the Arab world’s largest economy, is focused on diversifying its economy away from oil as part of its Vision 2030 programme. The kingdom is developing projects across sectors including real estate, petrochemicals, transport and hospitality to attract investment and boost employment.
New projects include Neom — a $500bn futuristic city comprising a nature reserve, coral reefs and heritage sites on a number of islands in the Red Sea — and Qiddiya, a huge entertainment and sports project.
The Red Sea Development Company is also building a mega-tourism project on Saudi Arabia’s west coast.
Global exports will almost double to $29.7tn from $17.4tn over the next decade with 13 markets, including Saudi Arabia, the UAE, Indonesia, Nigeria, China, India, South Korea and Kenya driving the growth, Standard Chartered said.
“Globalisation will drive the next decade of growth,” the lender said in its report, which is based on an analysis of historical trade data and projections until 2030, as well as insights from more than 500 senior company executives globally.
“Despite the recent push towards onshoring, growth corridors of the future will not just be intraregional — they will be global spanning Africa-East Asia, Asean-South Asia, East Asia-Europe, East Asia-Middle East, East Asia-Europe and South Asia-US,” the lender said.
Increased investment will flow through Asia, Africa and the Middle East, with 82 per cent of survey respondents considering new production locations in these regions in the next five to 10 years.
The report also found a significant trend towards the adoption of sustainable trade practices in response to climate concerns and a rising wave of conscious consumerism.
While almost 90 per cent of corporate leaders acknowledged the need to enact these practices across their supply chains, only 34 per cent ranked it under “top three” priority for implementation over the next five to 10 years.