Saudi Round-Up: Non-Oil Economy Boom
This week's round-up highlights Saudi Arabia's relentless pursuit of economic growth and diversification, as seen in its fintech surge, green energy projects, and new global partnerships.
From 02 September to 09 September 2024
General Business and Economy
Saudi Arabia’s Non-Oil Economy Shows Strong Growth in Q2
Saudi Arabia’s non-oil economy grew by 4.9% in the second quarter of 2024, driven by strong performance in the financial, insurance, and business sectors.
The General Authority for Statistics (GASTAT) reports that these sectors expanded by 7.1% YoY, which reflects the Kingdom's efforts to diversify its economic base under Vision 2030. While oil activities dropped due to production cuts, the overall economic outlook remains robust, with continued growth in other key areas.
Saudi Arabia Recognized as a Top Global Investment Hub
According to Investment Minister Khalid Al-Falih, Saudi Arabia has solidified its position as one of the world's most attractive investment destinations. Highlighting the Kingdom's strategic location, ongoing economic reforms, and commitment to innovation, the minister noted the rising interest from global investors, particularly in sectors like energy, infrastructure, and technology.
This success is attributed to Saudi Arabia's ambitious Vision 2030.
Saudi Private Sector Adds Over 37,000 Local Employees in August
In August 2024, Saudi Arabia's private sector employed an additional 37,009 Saudi nationals. This milestone represents a 6.94% increase compared to the previous month and meets the Kingdom's Vision 2030 objectives of boosting local employment and increasing female workforce participation.
The private sector now employs more than 11.5 million people, including over 2.3 million Saudi nationals.
IMF Lauds Saudi Arabia's Economic Progress and Vision 2030 Efforts
The International Monetary Fund (IMF) has acknowledged Saudi Arabia's significant economic gains and the positive impact of Vision 2030 in its latest review.
The report highlights progress in diversifying the economy, reducing dependency on oil, and implementing structural reforms. Key highlights include a growth of 3.8% in non-oil sectors and a big drop in inflation from 3.4% in January 2023 to 1.6% in May 2024.
Red Sea Global Awarded $6.13 billion Contracts to Global Partners for AMAALA
Saudi Arabia's AMAALA project, led by Red Sea Global, has awarded over 600 contracts worth $6.13 billion to international partners.
The luxury wellness-focused development will feature nearly 4,000 hotel rooms and be powered entirely by solar energy. With completion expected by 2025, AMAALA aligns with Vision 2030's goals of sustainability and tourism.
Saudi Arabia Expands Global Role in Fixed Income Markets at DMDF 2024
Saudi Arabia's increasing influence in global fixed-income and derivatives markets came into focus at DMDF 2024. Experts discussed the Kingdom’s expansion in the sector, a result of Vision 2030’s ambitious infrastructure projects.
The country's continuous efforts in debt financing, bond issuance, and stock lending are getting recognition from the global financial markets, with growing interest in green bonds and further derivatives market development underway.
Construction
Construction Permits Boost Investment in Saudi Arabia
In Q2 2024, Saudi Arabia saw a surge in investment activity largely driven by the issuance of 737 construction licenses. This represents a remarkable 27% of total licenses. The success illustrates a 32.1% year-on-year increase, supported by regulatory reforms and mega-projects like NEOM.
Other sectors, such as manufacturing and professional services, also witnessed substantial growth.
Automotive
Nissan Expands SUV Lineup in Saudi Arabia with New Models
Following the debut of the all-new 2025 Nissan Patrol, the company announced plans to introduce two additional SUV models in Saudi Arabia.
As the largest automotive market in the GCC, the Kingdom plays a pivotal role in Nissan’s expansion strategy. The upcoming models will feature advanced technologies and cater to Saudi Arabia's growing demand for innovative SUVs, aligning with the nation's youthful, tech-savvy population.
Saudi Arabia Explores High-Tech Auto Collaborations with China
Saudi Arabia is strengthening its high-tech automotive partnerships with China as part of its broader Vision 2030 goals. During recent talks, both countries discussed electric vehicle (EV) technology and other automotive innovations.
China’s expertise in EV manufacturing complements Saudi Arabia’s aspirations to become a regional hub for electric vehicles, especially as the Kingdom aims to convert 30% of vehicles in Riyadh to electric by 2030. This collaboration is set to bolster the Saudi automotive industry, which currently represents 40% of total sales in the MENA region.
Technology
Saudi Central Bank to Enable Samsung Pay Service in Q4 2024
The Saudi Central Bank has announced the introduction of Samsung Pay services in Saudi Arabia. Starting in the fourth quarter of 2024, Samsung Pay is expected to boost the adoption of digital payment solutions in the Kingdom, which is one of the objectives of the Financial Sector Development Program (FSDP).
Number of Fintech Companies in Saudi Arabia Rises to 224 by Mid-2024
During the 24 Fintech 2024 Conference, Saudi Arabia’s Minister of Finance revealed that, as of the end of Q2 2024, the number of Fintech companies in the Kingdom has risen to 224.
The minister also added that the value of venture capital investment in Saudi fintech companies amounted to SAR 7.1 billion during the same period, with online payments in the retail sector taking the lead and accounting for 70% of the total payments in 2023.
Saudi Fintech Investment Grows Sixfold, Reaching $666 Million in 2023
In 2023, Saudi Arabia's fintech sector saw a sixfold increase in venture capital investment, totaling $666 million. This growth was driven by new startups and innovative business models, supported by the Saudi Central Bank’s Regulatory Sandbox Initiative.
This shows that Saudi Arabia’s fintech sector is playing a big role in advancing the Kingdom’s economic diversification goals under Vision 2030, with more than 200 companies now operating in this space.
Saudi Fintech Assets Projected to Reach $64 Billion in 2024
Fintech assets in Saudi Arabia are projected to hit $64 billion by 2024.
Such growth, driven by innovations in blockchain, AI, and machine learning, will undoubtedly change the financial landscape by improving financial inclusion and service accessibility.
The World Bank highlighted the Kingdom’s strategic efforts to foster fintech innovation through supportive regulatory frameworks and talent development initiatives, which are positioning Saudi Arabia as a key player in the global fintech ecosystem.
BIM Ventures and SC Ventures Partner to Accelerate the Digital Transformation in Saudi Arabia
BIM Ventures has partnered with SC Ventures to accelerate digital transformation in Saudi Arabia. The agreement, signed during the 24 Fintech conference, focuses on building and scaling innovative startups across sectors like fintech and investment technology.
This partnership will combine SC Ventures' global expertise with BIM Ventures' local market insights, aligning with Vision 2030's goal to foster a dynamic entrepreneurial environment.
Saudi Arabia’s Technology Sector Could Gain $4 Billion from GenAI by 2028
A recent report published by the global consulting firm Strategy & Middle East reveals that Saudi Arabia's technology sector could generate $4 billion in profits by 2028 through the adoption of generative AI (GenAI).
While the telecom, media, and entertainment sectors are expected to benefit the most, with projected margin growths of 12–15%, GenAI’s role in boosting innovation, operational efficiency, and local intellectual property development is expected to have a transformative effect across all sectors.
Mobily Signs Six-Year Deal to Boost Operational Efficiency
Saudi telecom giant Mobily has signed a six-year agreement with Red Bull MOBILE, a future network communications firm, in a bid to boost its operational efficiency.
The collaboration focuses on automating business processes and leveraging digital solutions to improve performance across key areas. In addition to this, the deal represents Mobily's commitment to adopting advanced technologies as part of its broader strategy to support Saudi Arabia’s digital transformation efforts under Vision 2030.
Real Estate
Saudi Arabia Among the Top Countries in Global Real Estate Transparency
Saudi Arabia has advanced to 38th place in JLL’s 2024 Global Real Estate Transparency Index, making it one of the top two global improvers.
This leap in rankings reflects key government initiatives, including formalizing the land registration system and introducing 18 new regulations. The digitization of real estate data and collaboration between the public and private sectors have also been instrumental in this success.
Sustainability
Saudi Arabia Seeks Green Product Partnership with Italy
Saudi Arabia aims to further strengthen its collaboration with Italy in developing green products and technologies, which is going to position Italy as a key partner in sustainability.
Both nations aim to explore joint projects in renewable energy, sustainable industries, and decarbonization efforts, as these projects align with visions towards clean energy and environmental initiatives.
ACWA Power Secures $2.58 Billion for Major Solar Projects
ACWA Power secured $2.58 billion in financing for three major photovoltaic solar initiatives in Makkah and Qassim, with a total capacity of 5,500 MW. The 27.3-year financing will support the design, construction, and operation of the projects.
The Haden, Muwayh, and Al Khushaybi projects have production capacities of 2,000 megawatts (MW), 2,000 MW, and 1,500 MW, respectively.
Saudi Arabia and Singapore Strengthen Cooperation in Key Sectors
Saudi Arabia and Singapore are deepening ties in sustainability, SMEs, and advanced manufacturing. Saudi Arabia’s Minister of Industry held meetings with Singaporean leaders to discuss mutual opportunities, including innovation and the adoption of new technologies.
With trade volume between the two nations reaching $12.05 billion in 2022, a 50% increase from the previous year, the partnership is going to support Saudi Arabia's Vision 2030 goals and Singapore's expertise in industrial and economic development.
Tourism
Saudi Arabia Scraps Hotel Licensing Fees to Boost Tourism
On September 4, 2024, Saudi Arabia decided to eliminate hotel licensing fees with the goal of attracting more tourism investments. Motivated by broader Vision 2030 goals of increasing the contribution of to to the economy from 3% to 10%, the country expects this decision to encourage the development of more hotels and accommodations.
Trade and Infrastructure
Saudi Arabia Eliminates Export Customs Fees and Lowers Import Charges
Starting from October 6, 2024, Saudi Arabia is scrapping customs fees on exports and reducing import service charges to 0.15% of goods' value. The new fee structure introduces a $4 charge for customs declarations on small online shipments, benefiting both e-commerce and small businesses.
With this change, the country is boosting the Kingdom’s economic competitiveness and simplifying trade processes.
New Shipping Route to Strengthen Saudi-India Trade Relations
A new shipping service between Saudi Arabia and India has been launched to boost trade between the two nations. The service, connecting Jeddah Islamic Port with India’s maritime hubs of Mundra and Nhava Sheva, is expected to improve logistical efficiency, promoting economic ties and trade activities.
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