Reviving Relations: Saudi Arabia Supports 20.3% Growth in Thai-Saudi Trade
The Office of Trade Policy and Strategy (OTPS) <\/strong><\/span>indicates that <\/strong><\/span>the opportunity for exporting goods to the Saudi Arabian market <\/strong><\/span>has increased following the revival of diplomatic relations between the two countries. In terms of trade economics, both parties can collaborate in five main areas: labor, investment, tourism, trade, and food.<\/span> Products in the automotive sector, equipment and components, rubber products, gemstones and jewelry, machinery and machinery components, canned and processed seafood, and fresh, chilled, frozen, and dried fruits are expected to see significant growth. It is projected that in 2022 (as of February 1, 2022), the total trade value between the two countries will be approximately 280.336 billion baht, expanding by 20.3%.<\/p>
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Mr. Ronarong Poolpipat, Director of the Office of Trade Policy and Strategy (OTPS) <\/strong><\/span> stated that following the revival of diplomatic relations, in accordance with the policy to promote key export markets by Deputy Prime Minister and Minister of Commerce Jurin Laksanawisit, which emphasizes maintaining existing markets, expanding new markets, and revitalizing old markets, it has been found that the opportunity to export goods to the Saudi Arabian market is promising as it is one of the old markets that can be revitalized to increase export value, which will help drive the overall Thai exports to the Middle East region to grow. <\/p>
“The proportion of Thai exports to Saudi Arabia before the diplomatic relations were reduced averaged 2.4% (average from 1984 to 1988) and began to decline thereafter. In 1990, exports to Saudi Arabia contracted by 11%, but trade continued despite the declining export proportion.<\/span><\/p>
In 2005, the proportion of exports to Saudi Arabia began to improve, and the export value grew by as much as 63.6% as Saudi Arabia joined the World Trade Organization (WTO) and opened up more to international trade. Since then, the export proportion to Saudi Arabia has gradually improved, and the export value has also grown well until 2015 when exports began to slow down again. Saudi Arabia, which was once the 21st largest export market in 2015 (with a share of 1.4% of total exports), dropped to 29th place. <\/p>
The revival of diplomatic relations supports a 20.3% growth in total Thai-Saudi trade, valued at 280.336 billion baht. For this revival of diplomatic relations, in terms of trade economics, both parties can collaborate in five main areas: labor, investment, tourism, trade, and food. The OTPS estimates that strengthening the friendly relations between the two countries will be crucial. In particular, the revival of bilateral trade relations will be an important mechanism for cooperation that will promote the economy, open trade doors, and seek opportunities for joint investment. This will increase export opportunities to the Saudi market, with export values expected to exceed 100,000 million baht, which is the level Thailand once achieved in exports to Saudi Arabia (in 2014), and it is projected that in 2022 (as of February 1, 2022), the total trade value between the two countries will be approximately 280.336 billion baht, expanding by 20.3%, with exports valued at 54.678 billion baht, growing by 6.2%, imports valued at 225.658 billion baht, growing by 24.3%, and a trade deficit of 170.980 billion baht. Export products with high growth potential <\/strong>include automobiles, equipment and components, rubber products, gemstones and jewelry, machinery and machinery components, canned and processed seafood, and fresh, chilled, frozen, and dried fruits. Import products with high growth potential <\/span>include crude oil, chemicals, refined oil, other metal ores, scrap metal and products, ores and mineral products, household appliances and interior decoration items, and automotive components and equipment. As for potential export products that are worth promoting to the Saudi market, these are products that Thailand already has potential in the Saudi market, as well as products that have shown an increasing trend in imports from the global market over the past 3-5 years, such as: Agricultural and agro-industrial products, such as rice, fresh fruits (chilled, frozen, and dried, e.g., coconut, cashew nuts), fresh fish (chilled, frozen), processed fish (e.g., processed tuna), coffee, and sugar-based snacks (without cocoa). Industrial products <\/span>include automobiles, equipment and components, tires for passenger cars, buses, and trucks, refrigerators, freezers, and components, air conditioning units and components, household electrical appliances, ventilation or air circulation devices with fans, electrical equipment for circuit connection or protection, diamond jewelry, and fittings for pipes or tubes (e.g., joints, elbows, sleeves) made of steel or iron, wood and wood products, essential oils, etc. <\/p> 
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“Saudi Arabia” is the second-largest economy in the Middle East <\/strong><\/span> after Turkey. According to the World Bank, Saudi Arabia's Gross Domestic Product (GDP) is approximately 700 trillion US dollars, with an average income per capita of 46,700 US dollars. It is expected that in 2022, Saudi Arabia's economy will grow by 4.9% due to rising crude oil prices and a strong recovery in non-oil economic activities driven by expanding investments. Meanwhile, Saudi Arabia's economy is expected to continue growing at 2.3% in 2023.
In 2021, the proportion of exports to Saudi Arabia accounted for 0.6% of total exports due to the impact of falling crude oil prices and unrest in the Middle East, which are internal factors of the partner country's economy affecting international trade. Products that contracted during this period included automobiles and components, electrical appliances, rice, and rubber products, while wood and wood products, gemstones and jewelry, plastic pellets, and pet food continued to grow.
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