Chart 8: Saudi government non-hydrocarbon and private sector Chart 9: Crowding in domestic private sector investment when the investment growth are relatively correlated government sector retrenches can be challenging 20 ——— Government non-oil nominal GFCF (% of GDP) , 120 as =| i) 110 caeinaiiin coda eer, yoy) Private sector nominal GFCF (% of GDP) ” -———=Private sector GFCF (3yma, %yoy) Oil prices (US$/bbI, rhs) 100 15 70 80 50 10 60 30 40 10 5 10 20 -30 0 0 FLektF<eseseseaesgsesese ses sesy FFELFESBSSRSESSSSES DP OonoonnenredD? DODD Dd GD GG G&G GB GS DOooaoawneadrserDaD# DDD DD GGG GD FS NN oN DN ON DN NB Source: Haver, BofA Merrill Lynch Global Research. GFCF refers to Gross Fixed Capital Formation. Source: Haver, BofA Merrill Lynch Global Research. GFCF refers to Gross Fixed Capital Formation. Ambitious non-oil export and tourism targets, but little details The NTP targets increasing non-oil exports by SAR145bn (US$38bn, 6.0% of GDP) to SAR330bn (USS$88bn, 11.4% of 2020f GDP) over the next five years. Although implementation details are lacking, we anticipate that part of the increase could be linked to the higher mining output targeted. These would nevertheless be dependent on the global economic cycle. Higher exports of refined oil products, if all of the additional capacity to be installed by 2020 is exported, could add cUS$7.3bn to exports at current price levels (but not qualify towards non-oil exports targets under the NTP as they are classified as hydrocarbon exports). Currently, 61% of Saudi non-oil exports represents chemicals and plastics, and maintains a correlation with oil prices, and re-exports account for another 17% of total non-oil exports and have little added-value. Chart 10: Chemicals, plastics, re-exports form bulk of non-oil exports Chart 11: Non-oil exports are diversified in terms of destination SARbn lm other = 200 food 400 mm machinery , fF ride mmm metals \ | | 19% ; 150 | lam re-exports /\/ 80 26% mms plastics 4 \r mmm Chemicals f 4