The General Authority for Statistics closed the books on the second quarter’s merchandise trade this weekend, and the accounts show a surplus of SR61.5 billion, 62 percent wider than a year earlier. Exports rose 4 percent to SR286 billion. Imports fell 5 percent to SR224.5 billion. Read alone, the release describes a strong quarter. Read beside the national accounts GASTAT published a week ago, which measured oil activity contracting 24.8 percent over the same three months, it describes something stranger: the quarter in which the Kingdom shipped least sold for most.
The reconciliation is price. The national accounts count volumes, and real exports fell 24.6 percent in the quarter. The trade accounts count riyals, and export earnings rose. The distance between those two numbers is what buyers paid per unit, and it was wide enough to turn a volume contraction into a value gain. Oil exports earned SR203.4 billion, up 9 percent from a year earlier, on substantially fewer barrels. For the treasury, which collects riyals rather than barrels, this second ledger is the one that funds the budget.
Two Directions at Once
The surplus is also narrower than it was in the first quarter, when GASTAT recorded more than SR90 billion. Both movements are real and they measure different things. The sequential decline, roughly a third, is the disruption arriving in the external accounts one quarter after it arrived in output. The annual rise of 62 percent is the repricing that accompanied it. A reader who saw only one of the two comparisons would come away with a clean story; the accounts hold both.
The import line carries a quieter version of the same arithmetic. Imports fell 5 percent in value, but the national accounts measured real imports down 14.8 percent. The gap implies import prices rose by roughly a tenth, which is where the quarter’s freight, insurance and rerouting costs surface in the data: the Kingdom bought noticeably less and paid nearly as much for it. Consumer inflation, still below 2 percent, suggests the extra cost has so far stopped short of the shelf.
The Line the Program Watches
Non-oil exports fell about 7 percent to SR82.6 billion, and that is the figure the diversification program will read first. The price movements that protected crude earnings did not extend, at anything like the same scale, to the petrochemicals, plastics and processed goods the program is trying to grow. Their quarter was the logistics without the offset. How much of the decline was routing and how much was demand is the question the third-quarter release will begin to answer, because only one of those recovers on its own.
The trade accounts are the second of three documents that will define the year’s economic narrative. The GDP series recorded the contraction. The trade series has now priced it. The third document is the pre-budget statement expected in the autumn, which will translate the price windfall the trade data have sized into a fiscal stance. The second quarter’s summary fits in a sentence: the cost of the disruption was counted in volume, and the compensation arrived in price.