Saudi Round-Up: Industrial Growth Drives More FDI
This week's roundup brings you the most impactful business news and initiatives shaping the Kingdom's future
From 16 September to 23 September 2024
General Business and Economy
Crown Prince Commends Progress on Vision 2030
Saudi Arabia's Crown Prince Mohammed bin Salman outlined the impressive achievements in the Kingdom's Vision 2030 initiative, highlighting the successful economic diversification efforts.
Non-oil activities now contribute 50% to the real GDP in 2023. The tourism sector exceeded its 2030 target ahead of schedule by reaching 109 million visitors in 2023, leading to a new goal of 150 million tourists by 2030. And on top of all that, unemployment among Saudi citizens dropped to a historic low of 7.6% in the first quarter of 2024.
Saudi Arabia's Banking Sector Growth Boosted by Economic Diversification
Moody's reports that Saudi Arabia's economic diversification initiatives are accelerating growth in the banking sector. Here, industries like construction and tourism offer lucrative lending opportunities.
The Saudi Central Bank noted a 23% annual increase in bank profits in July. Moody's expects this positive trend to continue, projecting robust non-hydrocarbon GDP growth of 5.5% in 2024 and 2025, fueled by government investments and supportive policies.
Italian Federation of 7,000 Firms Plans Investments in Saudi Arabia
An Italian business federation representing 7,000 companies has announced plans to boost investments in Saudi Arabia.
During the Saudi-Italian Business Forum, officials highlighted sectors like machinery, chemicals, and automotive products. The Lombardy region, with a GDP exceeding $444 billion, aims to enhance Italian expertise in Saudi investments, scientific collaboration, and cultural exchange, offering incentives for Saudi investors.
UK Firms to Expand Operations in Saudi Arabia After High-Level Ministerial Meeting
UK companies are set to expand their presence in Saudi Arabia following a high-profile meeting between Saudi and UK ministers in Riyadh.
The discussions focused on strengthening bilateral trade and encouraging investment in key sectors such as innovation, industry, and mining. With over 1,100 British investors already benefiting from Saudi Arabia’s reforms, both nations aim to increase trade volume to £30 billion by 2030.
Saudi Arabia Introduces New Commercial Registration and Trade Name Laws
Saudi Arabia has approved new laws to streamline commercial registration and trade name processes, aiming to simplify doing business in the country.
The new regulations offer a unified national registration for businesses and protect trade names. Seeing how the country has already approved 104,000 registrations in Q1 2024, the reforms are set to further promote transparency and economic growth, benefiting a wide range of businesses.
Riyadh to Host 5th Annual Future Banks Summit & Awards KSA
The 5th Annual Future Banks Summit & Awards KSA is scheduled for September 24-25, 2024, at the InterContinental Hotel in Riyadh.
Over 200 financial leaders will gather to discuss AI, cybersecurity, and digital payments.
The summit supports Saudi Vision 2030, focusing on innovation and modernization of the banking sector to drive economic growth. Key topics include cloud migration and intelligent automation, highlighting the Kingdom’s ambition to become a global financial leader.
S&P Upgrades Saudi Arabia's Outlook to “Positive,” Affirms A/A-1 Credit Rating
S&P Global has reaffirmed Saudi Arabia's A/A-1 credit rating. This upgrade reflects the Kingdom's ongoing reforms and investments aimed at boosting the non-oil economy and ensuring public finance sustainability.
S&P anticipates increased growth driven by Vision 2030 initiatives and accelerated infrastructure projects to ease fiscal pressures.
Saudi Arabia Climbs to 4th Globally in UN E-Government Development Index
Saudi Arabia has advanced 25 places to rank fourth globally in the UN E-Government Development Index 2024, first regionally, and second among G20 countries in the digital services index.
Riyadh also secured third place among 193 cities worldwide.
The Kingdom's commitment to innovation and leadership in the digital economy under Vision 2030’s initiatives was highlighted as the main contributor to this achievement.
Automotive
Saudi Arabia's EV Surge Outpaces Global Trends
Saudi Arabia is making significant strides in the electric vehicle sector, with its rapid progress surpassing that of many other countries.
Industry leader Gary Flom praised the Kingdom's ambitious goals and accelerated development, attributing it to the government's Vision 2030 initiative. As part of this plan, Saudi Arabia is investing heavily in EV infrastructure and collaborating with international partners to establish a robust EV supply chain.
Saudi Car Rental and B2B Sectors to Drive EV Adoption by 2026, Says Industry Leader
According to Hashim Al-Fatayerji, regional executive director at Sixt, Saudi Arabia's car rental and B2B sectors are expected to drive electric vehicle adoption by 2026.
Speaking at the EV Auto Show in Riyadh, he expected a rise in EV dealerships, including American and European brands, and increased local production.
Saudi EV Auto Show Launches with Major Fleet Decarbonization Agreements
The Riyadh EV Auto Show began with notable progress being made in sustainable transport.
J&T Express Middle East signed with the Saudi National Transportation Solutions Company to receive 10 electric vans. In addition to this, Saudi Bulk Transfer partnered with NTSC and Electromin is on a multi-year decarbonization plan, initially acquiring four electric trucks. Finally, Rotana Waterfront teamed up with Electromin to enhance EV infrastructure in Jeddah, including installing public EV chargers at the Jeddah Corniche Waterfront.
PIF-Backed Lucid to Export Saudi-Made EVs Globally, Supporting 30% EV Target by 2030
US electric carmaker Lucid Motors, backed by Saudi Arabia's Public Investment Fund, plans to export a significant share of its vehicles produced in the Kingdom to regional and global markets.
At the EV Auto Show in Riyadh, Lucid's executive Ali Rizvi announced increased production efforts, which shows support for Saudi Arabia's goals of converting 30% of Riyadh's vehicles to electric by 2030, reducing emissions by 50%, and achieving carbon neutrality by 2060.
Industry and Manufacturing
Saudi and Italian Officials Discuss Cooperation in Manufacturing and Innovation
Senior officials from Saudi Arabia and Italy have explored collaboration opportunities in industrial innovation and advanced manufacturing technologies crucial to the Kingdom's Vision 2030 diversification strategy.
Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef met with Attilio Fontana, president of Lombardy's regional government, focusing on sectors like healthcare, energy, and food.
Saudi Arabia Launches Customs Exemption to Boost Experimental Production
Saudi Arabia has introduced a new customs exemption service via the Senaei platform to improve industrial competitiveness by removing duties on raw materials used in experimental production.
The initiative supports manufacturing facilities still in the construction phase and aligns with the Kingdom's goal to boost industrialization by reaching 36,000 plants by 2035.
Saudi Arabia's Expat Fee Waiver Fuels 14.7% GDP Growth in Industrial Sector
Saudi Arabia's decision to waive fees for expatriate workers in the industrial sector has led to a 14.7% increase in GDP, rising from SR392 billion in 2019 to SR592 billion in 2023. The policy boosted non-oil exports by 12% to approximately SR208 billion. Over 8,000 industrial firms benefited, saving around SR5 billion in fees, spurring innovation, and attracting skilled professionals to meet local demand.
Saudi Arabia's Container Traffic Increases by 14.6% in 2023
According to the General Authority for Statistics (GASTAT), Saudi Arabia's ports saw a 14.6% rise in both inbound and outbound container traffic in 2023 compared to the previous year.
Ship traffic at Saudi ports also increased by 33.8% in 2023. Boosting exports, particularly non-oil goods, is a key enabler of Saudi Arabia’s diversification goals as the country progresses in its Vision 2030 agenda.
Saudi Arabia's Ma'aden Acquires 25.1% Stake in Joint Venture from Alcoa for $1.1 Billion
Saudi Arabia’s Ma'aden has entered a binding agreement to acquire a 25.1% stake in its joint venture with U.S.-based Alcoa for approximately $1.1 billion. The transaction includes about 86 million Ma'aden shares worth $950 million and $150 million in cash. Ma'aden's CEO, Bob Wilt, highlighted Alcoa as a valued partner since 2009 and expressed enthusiasm for future collaboration to strengthen Saudi Arabia's mining sector.
Technology
Saudi Arabia Ranks 14th Globally and 1st in Arab World in 2024 Global AI Index
Saudi Arabia has climbed to 14th place globally and secured the top spot in the Arab world in the 2024 Global AI Index published by Tortoise Intelligence.
The Kingdom excels in the Government Strategy sub-pillar, reinforcing its position as a global AI leader, and ranks 7th in the Commercial Ecosystem sub-pillar. The index assesses 83 countries based on 122 indicators across seven sub-pillars.
Tourism
Saudi Arabia Leads G20 in Tourism Growth with 73% Increase in International Visitors
Saudi Arabia has become the fastest-growing tourism destination among G20 countries, recording a remarkable 73% increase in international visitors in the first seven months of 2024 compared to 2019.
According to the UN World Tourism Barometer, the Kingdom welcomed 17.5 million international tourists during this period. Additionally, Saudi Arabia continues to lead G20 countries in both international tourist arrivals and tourism revenues, which surged by 207%.
This growth is on track with the country’s Vision 2030 plan of attracting 150 million visitors by 2030 and increasing tourism's contribution to GDP from 6% to 10%.
Investments in Water Parks to Boost Saudi Arabia’s Tourism
Saudi Arabia plans to expand its tourism sector by developing international-standard water parks.
With over 150 million projected visits by 2030, the Kingdom is also adding 320,000 new hotel rooms to accommodate the surge. Experts like Devanshu Mathur of Boston Consulting Group say these aquatic attractions will diversify entertainment offerings and attract a broad range of domestic and international tourists.
Saudi Arabia's PIF Launches 'QSAS' to Develop Immersive Heritage Experiences
Saudi Arabia’s Public Investment Fund (PIF) has established the National Interactive Entertainment Co., known as QSAS, to create immersive storytelling experiences centered on the Kingdom's heritage and Islamic history.
Mishary Al-Ibraheem, head of entertainment, leisure, sports, and education at PIF, emphasized that the tourism and entertainment sector is a strategic local priority as they focus on enriching the tourism and entertainment experience.
Saudi Arabia’s PIF to create 11,000 jobs as it launches QSAS company
PIF’s newly launched company, QSAS, is projected to create over 11,000 direct and indirect jobs by 2030. The company will develop, own, and operate world-class interactive exhibitions across the country.
This initiative aligns with PIF's strategy to empower the local private sector through partnerships in building, event management, and technology.
Saudi Arabia Launches “Our Guests Are Our Priority” Campaign to Improve Hospitality Compliance
Saudi Arabia's Ministry of Tourism initiated the "Our Guests Are Our Priority" campaign in early September to strengthen compliance with licensing and classification standards among hospitality establishments.
The initial phase focuses on media and awareness initiatives engaging various tourism stakeholders to improve service quality for both domestic and international travelers.
Sustainability Drives Business Strategy in Saudi Arabia's Hospitality Industry
Investors in Saudi Arabia's hospitality sector are increasingly focusing on sustainability initiatives to attract clients and boost profits.
According to industry expert Mayer, the integration of Internet of Things technologies and advanced building management systems is revolutionizing energy efficiency in hotels while reducing CO2 emissions. New hotel developments will prioritize eco-friendly materials and technologies, making sure projects like those around the Red Sea do not harm ecosystems.
With strides in green technology, tourism expansion, and industrial innovation, Saudi Arabia is not only strengthening its global standing but also paving the way for a prosperous, sustainable future. Stay tuned for more updates as the Kingdom continues its remarkable progress toward achieving Vision 2030.
