DUBAI - The value of Saudi Arabia's imports from the United Arab Emirates (UAE) in August increased by about 31% month on month, official data showed on Monday, jumping back from a steep decline in July after the kingdom imposed new rules on imports from other Gulf countries.
Imports from neighbouring UAE rose to 4.1 billion riyals ($1.09 billion) from 3.1 billion riyals in July, according to data from the General Authority for Statistics. On an annual basis, Saudi imports from the UAE increased by about 47%.
The monthly increase follows a 33% decline in July, when Saudi Arabia amended rules on imports from other Gulf Cooperation Council (GCC) countries to exclude goods made in free zones or using Israeli input from preferential tariff concessions, a move seen as a challenge to the UAE's status as the region's trade and business hub.
"The July data would have shown the disruption of the new regulation as companies took time to get the paperwork in place, but this really shows it takes time for import substitutions, and goods are continuing to go into Saudi", said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
"Either exporters are absorbing the extra customs duties or some could manage to pass it on, but the critical point is that at this point the impact on trade is relatively modest", she said.
Despite being close allies, Saudi Arabia and the UAE are competing to attract investors and businesses.
Saudi overall exports increased by 58.9% year-on-year in August, the statistics authority said, adding in August last year exports were impacted by lockdowns and travel bans related to the COVID-19 pandemic.
The annual increase was mainly driven by oil exports, which went up 74.2% in August. ($1 = 3.7507 riyals)
(Reporting by Davide Barbuscia; Editing by Giles Elgood) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: email@example.com))