The trade relationship between Egypt and Saudi Arabia has witnessed a substantial uptick, with the Central Agency for Public Mobilization and Statistics (CAPMAS) reporting a 33.9% increase in trade exchange to reach $7.5 billion in the first nine months of 2024. This surge highlights the strengthening economic ties between the two nations, driven by increased exports, robust imports, and strategic diplomatic engagements.
Impressive Year-on-Year Growth
CAPMAS announced on Monday that the trade exchange between Egypt and Saudi Arabia rose sharply from $5.6 billion in the same period last year to $7.5 billion in 9M 2024. This remarkable growth underscores the dynamic and evolving nature of bilateral trade relations.
Breakdown of Exports and Imports
Egyptian exports to Saudi Arabia have grown significantly, increasing by 26.3% year-on-year to reach $2.4 billion in the first nine months of 2024, up from $1.9 billion in 2023. The top export commodities include:
- Copper and Its Products: $459 million
- Vegetables and Fruits: $293 million
- Ready-Made Clothes: $128 million
- Electrical Appliances: $215 million
- Iron and Its Products: $167 million
These exports reflect Egypt’s diverse industrial base and its ability to cater to the growing demands of the Saudi market, particularly in construction and consumer goods.
Egyptian Imports from Saudi Arabia
Imports from Saudi Arabia to Egypt have surged by 37.8%, totaling $5.1 billion compared to $3.7 billion in the same period last year. The leading import categories are:
- Fuel, Mineral Oils, and Their Distillation Products: $3.4 billion
- Plastics and Their Products: $984 million
- Organic Chemical Products: $208 million
- Aluminium and Its Products: $158 million
- Paper and Paper Pulp Products: $81 million
The significant rise in imports, particularly in energy and plastics, highlights Egypt’s reliance on Saudi Arabia for essential commodities that support its industrial and economic activities.
| Category | Volume in 9M 2024 (USD) | Volume in 9M 2023 (USD) | YoY Growth (%) |
|---|---|---|---|
| Egyptian Exports | $2.4 billion | $1.9 billion | +26.3% |
| Egyptian Imports | $5.1 billion | $3.7 billion | +37.8% |
| Total Trade Exchange | $7.5 billion | $5.6 billion | +33.9% |
Investment Flows and Economic Implications
Saudi Investments in Egypt
Saudi investments in Egypt have seen a decline, amounting to $511.3 million in the first nine months of fiscal year 2023/2024, down from $2.3 billion during the same period in 2022/2023. This reduction may be attributed to shifting investment strategies or external economic factors impacting Saudi Arabia’s investment capacity.
Egyptian Investments in Saudi Arabia
Conversely, Egyptian investments in Saudi Arabia also experienced a slight decrease, totaling $147.1 million compared to $190.1 million in 2023. While both countries are experiencing a dip in direct investments, the overall trade growth indicates a continued strengthening of economic ties.
Remittances: A Vital Economic Pillar
Remittances play a crucial role in the economic relationship between Egypt and Saudi Arabia.
Egyptian Remittances in Saudi Arabia
The value of remittances from Egyptians working in Saudi Arabia amounted to $8.3 billion in fiscal year 2022/2023, down from $11 billion during 2021/2022. These funds are vital for supporting families and contributing to Egypt’s economy.
Saudi Remittances in Egypt
Remittances from Saudis working in Egypt saw an increase to $26.1 million, up from $17.1 million. Although significantly smaller in scale compared to Egyptian remittances, this growth indicates an expanding presence of Saudi nationals in Egypt’s workforce.
Migrant Population
The number of Egyptians residing in Saudi Arabia was estimated at 1.1 million in 2023, underscoring the deep-rooted labor and economic connections between the two countries.
Strategic Diplomatic Engagements
President Abdel Fattah Al-Sisi’s participation in the Extraordinary Arab-Islamic Summit held in Riyadh played a pivotal role in enhancing economic relations. The summit provided a platform for discussing trade agreements, investment opportunities, and collaborative projects aimed at fostering mutual growth.
Future Prospects: Sustaining and Enhancing Trade Relations
Looking ahead, both Egypt and Saudi Arabia are poised to sustain and further enhance their trade relationship by exploring new sectors and leveraging their strategic advantages.
- Technology and Innovation: Collaborating on technological advancements to boost industrial productivity and innovation.
- Renewable Energy: Joint ventures in renewable energy projects to support sustainable development goals.
- Tourism and Hospitality: Expanding cooperation in tourism to attract more international visitors and boost the hospitality sector.
Economic Diversification
Egypt’s ongoing efforts to diversify its economy by focusing on sectors like renewable energy and digital transformation align well with Saudi Arabia’s strategic initiatives. This synergy is expected to drive sustained economic growth and create new opportunities for businesses in both countries.
The 33.9% increase in trade exchange between Egypt and Saudi Arabia in the first nine months of 2024 highlights the robust and growing economic partnership between the two nations. Despite a decline in direct investments, the significant growth in both exports and imports underscores the deepening trade relations. With continued diplomatic engagements and strategic initiatives, Egypt and Saudi Arabia are well-positioned to build a sustainable and mutually beneficial economic relationship that supports long-term growth and stability in the region.
