international economics discussion question and need the explanation and answer to help me learn.
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Requirements: Word limit: 100 to 150 words.
Balance of Payments in KSA
Balance of payment is characterized as the economic transaction of a country. Balance of
payment contains all the records of the entire country’s International dealings with other
countries. The Balance of Payment provides the transaction history of the country. The Kingdom
of Saudi Arabia is the largest exporter of oil into the rest of the world, which is very beneficial
for improving their trade status at the balance of payment. The Kingdom of Saudi Arabia’s
balance of payment is characterized by three accounts: the financial account, the capital account,
and the current account. The financial account contains information about the assets of a country.
The current account of a country contains information about imports and exports. The capital
account of a country contains information about the country’s investments (Carbaugh, 2019).
Here are some facts about the balance of payments of the Kingdom of Saudi Arabia.
According to the World Bank survey in 2022, The Kingdom of Saudi Arabia has exports of
442569 million dollars and imports of 258789 million dollars. The primary and secondary net
income of the Kingdom of Saudi Arabia is 11093 million dollars and 44120 million dollars,
respectively. According to the World Bank Statistics 2022, the current account balance is 150753
and the Kingdom of Saudi Arabia contains a total reserve of 478232 million dollars (World
Bank, 2022).
The supply and demand are considered scheduled dependent as they are entirely
dependent upon the market conditions. Factors like inflation rate, interest rate, the balance of
payments, and geopolitical events all post their direct impact on the country, and the demand and
supply fluctuation are also due to these factors. The driving schedule makes the efficient space to
deal with all the fluctuations in the interest rate, inflation rate, trade balance, and other events
(Hanushek & Woessmann, 2020).
From the above-mentioned statistics, it is now clearly indicated that the Kingdom of
Saudi Arabia has a surplus palace of payment. The surplus of the Kingdom of Saudi Arabia is
due to its high exports of oil. Exports of oil is a leading factor in the economy of the Kingdom of
Saudi Arabia. Oil prices in the global market provide many benefits to the Kingdom of Saudi
Arabia, but the oil prices are highly volatile, and the economic indicators of KSA depend upon
the oil exports into the market. Oil exports is higher than any other import in the Kingdom of
Saudi Arabia, which provides positive merchandise trade. Among imports and exports, there is a
surplus for export in the Kingdom of Saudi Arabia as it is the highest exporter of oil in the world.
Balance of payment is also positive for the Kingdom of Saudi Arabia as it contains huge net
income from oil exports. The net current account balance is also positive as the net incoming
kingdom of Saudi Arabia is gaining from the Oil exports, and Saudi Arabia is spending less on
imports than it is gaining from the exports (World Bank, 2022).
References
Carbaugh, R. J. (2019). International economics. South-Western Cengage Learning.
Hanushek, E. A., & Woessmann, L. (2020, January 1). Chapter 14 – Education, knowledge
capital, and economic growth (S. Bradley & C. Green, Eds.). ScienceDirect; Academic
Press. https://www.sciencedirect.com/science/article/abs/pii/B9780128153918000148
World Bank. (2021). Current account balance (BoP, current US$) – | Data. Data.worldbank.org.
https://data.worldbank.org/indicator/BN.CAB.XOKA.CD?locations=KSA
World Bank. (2022). World Development cIndicators | The World Bank. Wdi.worldbank.org.
http://wdi.worldbank.org/table/4.17