Saudi Arabia's wholesale and retail trade sector has steadily expanded over the past few years and is projected to maintain growth after the Gulf Kingdom joined the World Trade Organisation (WTO) in 2005, a Saudi bank said yesterday.
The sector, which connects 25 million residents, consumers and producers of commodities and industrial products, generated a record SR297 billion (Dh294bn) in sales to local consumers in 2008, said the National Commercial Bank (NCB), Saudi Arabia's largest bank by assets.
At the end of 2007, the sector was operative through 74,223 outlets across different economic activities and has had robust geographic presence throughout the kingdom, NCB said in its weekly bulletin, sent to Emirates Business. "The sector is an important segment of the Saudi domestic economy, with a valued-add of SR81bn in 2008, which represents about 11 per cent of the non-oil GDP. By our estimate, the kingdom's consumers made purchases of goods and services valued at SR297bn in 2008 and we expect this figure to edge higher this year," the report said.
"Obviously, the opening up of the wholesale and retail trade to FDI since the Saudi accession to WTO has added to the depth and sustainability of the sector."
The study said the sector, serving as a channel of wealth distribution through jobs creation and new business opportunities for Saudi entrepreneurs, provides jobs to nearly 1.1 million skilled and semi-skilled workers and generates sales value with collective worth of about SR160bn annually.
It said the sector is also a lucrative business channel for domestic banks, creating business through opening letters of credit that were valued at SR212bn in 2008, the highest on record in the last decade.
Saudi Arabia is by far the largest economy and market in the Middle East, with its nominal gross domestic product peaking at about $46bn (Dh168.8bn) in 2008, more than a fifth of the total Arab GDP.
Hydrocarbon exports alone stood at about $309bn last year, their highest level since the kingdom began exporting crude.
Arab League figures showed Saudi Arabia private consumption, involving spending by local families and institutions on goods and services, stood at about $88.4bn in 2007 and was expected to have exceeded $90bn in 2008.
The 2007 figure accounted for more than 14 per cent of the total Arab private consumption of about $600bn.
The UAE came second in 2007, with its private consumption standing at about $85bn. In terms of per capita consumption, the UAE was far ahead of Saudi Arabia given its relatively small population. The ratio in the UAE stood at about $19,700 per year against $3,850 in Saudi Arabia.
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