Growth in output per capita and in population growth
According to the report published by the World Bank in 2012, the Gross Domestic Product (GDP) per capita growth in Saudi Arabia was estimated to 4.36 percent. However, in the third quarter of 2012, the GDP in this country expanded to 5.87 percent. This growth rate is according to the report released by the Saudi Arabia Monetary Agency. The growth is associated by the country’s 20 percent possession of world’s proven reserves of petroleum. On the other hand, the average yearly percentage change in the Saudi Arabia population as a result of surplus/deficit in the economy is estimated to 1.523 percent in 2012.
Economy of Saudi Arabia
The economy of Saudi Arabia is an open economy where the exports of petroleum products constitute a great percentage in the GDP. However, the political and social system of the country id closed with minimum involvement in the global economy in its effort to achieve the goal of becoming a global player.
Saudi Arabia labor force
The aggregate labor force constitutes of people aged 15 years and above who meet the requirement international Labor Organization conditions. Generally, the labor force of the country is made up of armed forces, first-time job seekers, unemployed, and the international labor force. The government had made efforts to increase the supply of labor, through expansion of remaining system and education. However, the country depends on the foreign workers because they provide higher quality labor force than the country counterpart.
Comparative advantage of Saudi Arabia
The country possesses a fifth of the global oil resources which boosts the economy of the country. However, the industrialization efforts that were established in 1980s have resulted to significant diversification. This has built the comparative advantage of the country. Currently, the country’s competitive advantage is focusing of developing a world class business context that integrates an easy of trade with low cost. The trade in the country is free market economy that is characterized with competition.
Type of economy
The type of the economy in Saudi Arabia is a free market economy where there are few restrictions on the exchange and ownership of the commodities. The economy had experienced changes in the last few years. The free market had progressed from a basic agricultural environment into global and regional economic power with improved infrastructures.
Balance of payment
The country is in a good shape with reference to balance of payment because over the last few years, the country has been experiencing surplus balance of payment. The total exports of the country exceed the total import by $144.2 billion.
Saudi Arabia foreign exchange
The Saudi Arabia currency is the Saudi Riyal and its intervention currency is the United State Dollar. The value of SRI is determined by the Saudi Arabia Monetary Agency in collaboration to the ministry of finance. The foreign exchange is undervalued in sense that it is cheaper to purchase goods and services in the country using U.S. Dollars.
Trading agreement
Saudi Arabia has been recognized as the most significant trading nation in the world, and it is recognized as Kingdom of Saudi Arabia (KSA). The country signed an agreement with the World Trade Organization as 149th member. This organization has helped the country to produce more goods and services, and increased imports and exports in the economy.
Conclusion
According to the data provided above, Saudi Arabia remains the Arab’s largest economy in the world. It has emerged safe and sound and is prepared to attain a stronger economic growth in the coming fiscal year. This is illustrated by significant drop of debt from 7 percent of the GDP relative to 82 percent in the last nine years. The country has established a 2005-2010 eighth plan that is focused in economic diversification that promotes education and women participation in the economy.
Works cited
Pindyck, Robert S, and Daniel L. Rubinfeld. Microeconomics. Upper Saddle River, N.J: Pearson Prentice Hall, 2005. Print.
Aarts, Paul, and Gerd Nonneman. Saudi Arabia in the Balance: Political Economy, Society, Foreign Affairs. Washington Square, N.Y: New York University Press, 2005. Print.
Niblock, Tim, and Monica Malik. The Political Economy of Saudi Arabia. Abingdon, Oxon: Routledge, 2007. Print.
