Economy

S&P Global Ratings has revised Saudi Arabia's forecast from stable to positive, highlighting the nation's strong non-oil growth prospects and economic resilience. The agency noted that the Saudi government's potential for further reforms and investments is expected to boost the non-oil economy. This revised outlook also reflects Saudi Arabia's ability to withstand volatility in the hydrocarbon sector. We expect to...

Saudi Arabia's economy shrank by 0.3% in 2023 compared to the previous year, primarily due to an 8.9% year-on-year decline in oil activities. According to the General Authority for Statistics, the kingdom's seasonally adjusted real GDP grew by 1.4% from Q1 2024, driven by a 4.9% increase in non-oil activities year-on-year and a 2.1% rise quarter-on-quarter. In Q2 2024, Saudi...

Saudi Arabia's non-oil sector grew by 4.9% year-on-year in Q2 2024, driven by significant gains in the financial and insurance sectors, as reported by the General Authority for Statistics (GASTAT). The financial, insurance, and business services sectors saw a notable increase of 7.1% compared to the same period last year. This growth is part of the Kingdom's broader efforts to...

Saudi Arabia is set to eliminate fees for customs services related to exports and reduce import service fees to 0.15% of the goods’ value. This change, effective from October 6, aims to streamline trade processes and bolster business activities. The Zakat, Tax, and Customs Authority (ZATCA) introduced a new fee structure, including an SR15 ($4) charge for customs declaration on...

Saudi Arabia's non-oil sector expanded by 4.9% in the second quarter of 2024, spurred by growth in financial and insurance sectors, according to the General Authority for Statistics. Financial, insurance, and business services saw a 7.1% increase compared to the previous year. The non-oil sector also grew by 2.1% from the previous quarter, showcasing the Kingdom's push to diversify its...

Experts emphasize that improving education quality in the Gulf is essential for realizing the region's economic potential. Reports from the World Bank and regional consultancies highlight that merely increasing access to schools is insufficient; the focus must also be on enhancing education standards. The World Bank's Human Capital Index indicates that a child born today in the Gulf Cooperation Council...

The International Monetary Fund (IMF) has published a favorable report on Saudi Arabia after concluding Article IV consultations. The report highlights that Saudi Arabia’s financial and regulatory reforms have spurred economic growth, curbed inflation, and reduced unemployment to record lows. It commends the Kingdom's ongoing economic transformation and diversification efforts under Vision 2030. The IMF praised Saudi Arabia’s macroeconomic policies...

Saudi Arabia Lowers Oil Prices Amid Demand Concerns Saudi Aramco has reduced the price of its Arab Light crude for Asian markets by 70 cents per barrel, setting the new price at $1.30 above the regional benchmark. This adjustment, slightly less than the anticipated 85-cent reduction, reflects growing worries about declining demand. This week, oil prices dropped significantly due to...

OPEC Plus Extends Oil Production Cuts OPEC Plus, led by Saudi Arabia, has decided to extend its current oil production cuts until at least December. This decision comes amidst weakening demand and expectations of increased production from non-OPEC countries, including the United States. The extension contrasts with earlier plans to ease production cuts, which were initially put in place to...

The International Monetary Fund (IMF) has projected that Saudi Arabia's current account balance might weaken due to falling oil prices and substantial investment-related imports. Last year, the kingdom's current account surplus dropped sharply to 3.2% of GDP, driven by reduced exports and strong growth in investment-related imports, according to the IMF. However, a record services balance surplus, including a 38%...

Saudi Arabia, the world's largest crude oil exporter, benefits from remarkably low production costs, around $10 per barrel. This is significant as 75% of its fiscal revenue comes from oil. However, major expenditure projects under Vision 2030 are pushing the fiscal breakeven oil price higher, widening the kingdom's deficit. The International Monetary Fund (IMF) forecasted the breakeven oil price at...

Saudi Arabia is undergoing significant economic transformation aimed at reducing its dependence on oil. The government is enacting comprehensive reforms that include changes to regulatory, legal, and fiscal frameworks. These efforts are bolstered by substantial public investment in infrastructure, new economic sectors, and ambitious projects like Neom. The results of these reforms are promising: the non-oil economy is growing steadily,...

What's happening? Saudi Arabia's non-oil sector experienced a modest recovery in August, suggesting increased confidence in the private sector. Implications Growth in the non-oil sector slightly improved in August, following a two-year low in July. The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) rose to 54.8 from 54.4. Although still below the long-term average of 56.9, the...

The annual inflation rate in Saudi Arabia witnessed a rise to 1.5 percent in July, in comparison to the previous year, with a notable surge in housing-related expenses, as per the latest figures released by the authorities.Insights from the General Authority for Statistics reveal that a 9.3 percent increase in the prices of housing, alongside utilities such as water, electricity,...

In a bold economic transformation, Saudi Arabia is poised to allocate $1 trillion to enhance six key sectors by the end of this decade. The kingdom's focus is shifting towards a diversified portfolio, with the oil industry set to receive a notably reduced slice of the investment pie.According to a prominent financial institution's analysis, approximately 73% of the investment will...

The Ministry of Tourism in Saudi Arabia has disclosed a significant financial influx from inbound tourists for the year 2023, amounting to an impressive SAR141 billion. The annual tourism statistics report for 2023 revealed that the majority of this expenditure, exceeding SAR45 billion, was allocated to lodging facilities. Shopping by these visitors generated over SAR25.5 billion, while about SAR21.5 billion...

The Jazan region, recognized for its verdant landscapes and optimal agricultural conditions, has successfully harnessed these attributes to become a key player in the farming sector. Among the variety of crops produced, figs have notably stood out, becoming a symbol of the region's agricultural prowess. The Ministry of Environment, Water, and Agriculture (MEWA) has highlighted the significance of this fruit,...

Saudi Arabia has set a strategic goal to significantly reduce its financial commitment to the oil sector, planning a $40 billion cut by the year 2028. The nation's focus is shifting towards the expansion of renewable energy and mining sectors.Information from Goldman Sachs Group indicates that Riyadh is gearing up to channel approximately 73% of its investments into non-oil sectors...

A recent analysis from Goldman Sachs reveals that Saudi Arabia is set to channel $1 trillion into strategic sectors by the year 2030, with the aim of diversifying its economy beyond the oil industry. The investment giant anticipates a 'capex super-cycle' with 73% of the funds being allocated to non-oil industries.Priority areas for investment over the next decade include clean...

Saudi Arabia is set to channel a lower amount of capital into its oil industry than what was previously anticipated, as part of its ambitious strategy to allocate $1 trillion across various strategic sectors by 2030.An analysis by Goldman Sachs Group Inc. indicates that approximately 73% of the kingdom's total investments will be injected into non-oil sectors by the end...

In July, the yearly inflation rate in Saudi Arabia remained constant at 1.5 percent, the same as the previous month's record low since December 2023. This stability was reported by the General Authority for Statistics (GASTAT) and occurs in spite of a significant surge in housing rental costs.Housing rentals experienced an 11.1 percent increase over the past year, marking the...

The Kingdom of Saudi Arabia has seen its official reserve assets escalate to SR1.7 trillion (equivalent to $452.8 billion) as of July, marking a 6.06 percent growth compared to the previous year, recent data indicates.According to figures from the Saudi Central Bank, also known as SAMA, the bulk of these assets, 94.53 percent to be precise, was held in international...

The Kingdom of Saudi Arabia is setting a strategic focus on broadening its economic landscape and enhancing the development of its workforce, as articulated by the Minister of Economy and Planning, Faisal bin Fadel Al Ibrahim.These remarks were shared at the World Economic Forum's Annual Meeting of the New Champions in Dalian, China, where the minister took part in a...

During a recent dialogue session in Dalian, China, Saudi Arabia's Minister of Economy and Planning, Faisal Al Ibrahim, provided insights into the progress of the country's ambitious Vision 2030. Halfway through the implementation of this transformative agenda, the kingdom's economy is witnessing significant growth, particularly in non-oil sectors.At the 'What do we expect from future growth?' session, part of the...

While participating in a panel entitled What do we expect from future growth in Dalian, China, the Saudi Minister of Economy and Planning, Faisal Al-Ibrahim, highlighted the kingdom's progress toward its ambitious Vision 2030. The minister's insights were shared at the New Champions Dalian 2024 meeting, part of a World Economic Forum initiative.The minister announced that non-oil activities have grown...

Saudi Arabia is currently rethinking some of its more visionary large-scale developments as part of its Vision 2030 plans. These include the highly anticipated Neom megacity and an expansive entertainment complex near Riyadh.Recent narratives suggest that the nation is facing financial pressures that are affecting its grand ambitions.An advisor connected to the government, preferring to remain anonymous, conveyed to the...

In a significant development for agricultural financing, the heads of two influential financial institutions convened to discuss collaborative strategies. Dr. Mohammed Al-Jasser, leading the Islamic Development Bank, met with Dr. Alvaro Lario, the President of the International Fund for Agricultural Development. Their dialogue took place against the backdrop of the 19th gathering of the Arab Coordination Group's institution leaders, hosted...

On the fringes of the Arab Coordination Group's 19th head meeting in Vienna, Austria, the President of Sierra Leone, Julius Maaden Bio, held a strategic discussion with the Islamic Development Bank Group President, Dr. Muhammed Al-Jasser. This encounter was aimed at fostering a stronger partnership between the two entities.Key topics on the agenda included enhancing developmental and economic collaboration with...

Since taking the helm on June 21, 2017, Crown Prince Mohammed bin Salman has been the architect of an ambitious economic overhaul, catapulting the Saudi Arabian economy to the forefront of the G20's fastest-growing nations.As the chairman of the Council for Economic and Development Affairs, the Crown Prince has been instrumental in pioneering initiatives such as the initial public offering...

Saudi Arabia is exploring new markets and considering stepping away from the longstanding practice of trading oil exclusively in U.S. dollars. This significant shift could undermine the dollar's premier status in the global oil market, according to insights from the Atlantic Council.The stability of the U.S. dollar as the primary currency for international trade and finance could be jeopardized if...