Saudi Round-Up: Economic Growth Through Innovation and Investment
This week’s round-up includes general business news, and highlights from the automotive, fintech, industry and manufacturing, technology, real estate, and tourism sectors.
From 30 April to 8 May
The Kingdom’s GDP Shows a 1.3% First Quarter Growth
According to the General Authority for Statistics, the Kingdom’s 1.3% rise in the first quarter of the year compared to the same period last year included a 0.5% growth in non-oil activities.
The Kingdom’s non-oil activities have grown by 2.8% year-on-year as the country reduces its traditional dependence on oil through economic diversification as per Vision 2030.
The Kingdom’s Ministry of Finance also announced an increase in the non-oil revenues amounting to SAR111.512 billion ($29.73 billion), resulting in a 9% jump compared with the same period last year.
The European Chamber of Commerce to Open in Riyadh
Riyadh will witness the debut of the European Chamber of Commerce this week. This marks a pivotal step toward strengthening economic ties between Saudi Arabia and the Europe region. Marking the first European Chamber in the GCC, this move is set to increase the influx of European businesses entering Saudi Arabia. ECCKSA pledges to level the playing field for European and Saudi enterprises, enhancing market access and fostering collaboration. Through sector-specific committees, it aims to address industry challenges, providing valuable insights for long-term economic growth.
This development underscores the growing importance of EU-Saudi collaboration, following agreements made at the Saudi-European Investment Forum. With trade reaching $80 billion and over 1,300 European companies investing in Saudi sectors, the inauguration of ECCKSA signals a commitment to deeper ties and mutual prosperity.
S&P Global Report Points to Bank and Capital Market Success
According to S&P Global, the activity of Saudi banks and the capital market are set to grow the Saudi private sector and the wider economy.
The report said that the Saudi transformation program for economic stimulation and diversification would require around $1 trillion in investments. It expects banks and capital markets to make a significant contribution to this sum. The firm predicts Saudi GDP growth of 2.2% in 2024 and 5% in 2025 with the non-oil economy playing a significant role.
Alvarez & Marsal Opens Headquarters in Riyadh
The inauguration of Alvarez & Marsal’s regional headquarters in Riyadh underlines growing international confidence in the Saudi economy. Alvarez & Marsal joins over 180 major international companies, including Apple, Microsoft, Amazon, the IMF, and Google.
The firm intends to drive innovation and growth in Saudi Arabia by leveraging local insights. The move underscores the global consulting firm’s commitment to Vision 2030.
Saudi PIF and BlackRock to Establish Multi-Asset Investment Platform
An initial investment mandate of as much as $5 billion from the Saudi Public Investment Fund marks the beginning of the PIF’s agreement with BlackRock Saudi Arabia to establish a multi-asset investment platform based in Riyadh.
Named BlackRock Riyadh Investment Management, the diverse and dynamic platform will be the first of its kind in Saudi Arabia. The platform will support continued economic diversification and the growth of the Kingdom’s capital markets.
Tourism
Hospitality Companies Sign Saudi Market Deals at Future Hospitality Summit
Multiple hospitality firms signed construction and operation deals at the Future Hospitality Summit in Riyadh.
Among these deals, Accor is poised to build 45 new Saudi hotels by 2030. It expects to add over 25,000 rooms and launch a variety of brands. Ladun Investment Company will partner with Cheval Collection to construct and operate the hotel apartment tower Cheval Ladun in Riyadh. And Marriott International has signed an agreement with Al Qummah Hospitality to bring the Marriott brand to Jeddah.
Saudi Tourism Investment Company Reveals City of Hail as Next Destination
Asfar, the Saudi PIF’s tourism investment arm, has announced its plan to make the northwestern city of Hail its fifth destination development, after Al-Baha, Al-Ahsa, Taif, and Yanbu.
The organization aims to bridge the divide between the public and private sector while investing in and developing attractive travel destinations. Asfar CEO Fahad bin Mushayt emphasized a need for a mix of foreign and local operators and investors.
Qiddiya Launches the Largest Water Theme Park in the Region
Qiddiya Investment Company (QIC) reveals Aquarabia, Saudi's groundbreaking water theme park, alongside Six Flags Qiddiya City in 2025, marking Saudi's ascent as a global tourism destination. With 22 world-record rides and family-centric experiences, both parks forecast 10,000 job openings, aligning with Saudi Vision 2030's economic goals.
Doubling down on these unique experiences, Aquarabia is anticipated to attract an influx of tourism-focused companies to contribute to Saudi's leading projects. By integrating eco-friendly technologies, these parks epitomize Saudi's commitment to environmental stewardship, enticing businesses to be part of the Kingdom's transformative tourism landscape.
Saudi Arabia and Egypt Lead MENA Travel Destinations in 2024
According to a study by Singapore-based travel booking app Wego, Saudi Arabia and Egypt maintain their stronghold as the top destinations for Middle East and North Africa (MENA) travelers in 2024. Egypt takes the lead, closely followed by Saudi Arabia, underscoring the Kingdom's ongoing efforts to establish itself as a global tourism hotspot, in line with its ambitious National Tourism Strategy aiming to attract 150 million visitors by 2030.
The study's findings reveal a consistent trend, with Saudi Arabia and Egypt retaining their top positions for over a decade. Meanwhile, Italy's emergence as the second favorite European destination among Middle East travelers signifies strengthening ties, backed by joint investments and enhanced connectivity. As travel preferences evolve, destinations closer to the Gulf region continue to dominate, while countries farther away experience declines in visitor interest.
Automotive
Partnership Between Lucid and KACST to Develop EV Technology
Saudi Arabia’s King Abdulaziz City for Science and Technology signed a deal with California-based electric vehicle manufacturer Lucid Group to develop EV technology in the Kingdom.
The Saudi PIF holds a significant stake in Lucid and the government will buy as many as 100,000 Lucid vehicles over 10 years. The organizations aim to drive innovation and inspire eco-responsibility throughout the energy and transportation sectors by investing in research and development, including studies in artificial intelligence.
Fintech
Fintech Driving Digital Transformation
In the study “Realizing Potential of Fintech in Kingdom of Saudi Arabia” by international management consulting company Arthur D. Little, the firm points to the Kingdom’s rapid growth and innovation, which is bringing it nearer to becoming a regional financial hub.
Local fintech companies have seen more than $1 billion in investments to date, supporting Saudi’s strategy for advancing the fintech sector as per Vision 2030.
Cashless Payments to Rise by 7.6% in 2024 After Saudi Push
A report from London-based data analytics firm GlobalData shows that the Saudi card payment market may grow by 7.6% this year to $146.8 billion. The firm projects an annual increase of 6.4% between now and 2028.
These figures reflect the Saudi government’s desire for a cashless society alongside the country’s robust and developing digital payment infrastructure. Vision 2030 aims for 70% of payments to be electronic by 2025.
Abyan Capital’s $18 Million in Funding Demonstrates Confidence in Saudi AI
STV, Aramco, Wa’ed Ventures, and RZM Investment all participated in funding Abyan Capital, underscoring the growing confidence in the value of AI in the Kingdom.
The $18 million in funding will help Abyan Capital develop its digital investment automation and optimization platforms. According to CEO Al-Jeraiwi, the firm aims to become the digital retail investment house.
Kingdom Looks to Grow Foreign Investment Via Technology
According to the 2023 Financial Sector Development Program report, the Saudi Capital Market Authority is set to develop the investment environment and attract more investors, increasing assets under management to 29.4% of GDP by 2024.
The report highlights the Kingdom’s ongoing competitiveness and highlights the importance of innovation and technology investment. Mohammed El-Kuwaiz, Chairman of the Capital Market Authority, noted the capital market ecosystem’s commitment to Saudi Vision 2030.
Industry and Manufacturing
Saudi Arabia to Incentivize Industrial Projects With Up To 75% of Funding
In addition to mining potential and qualitative capabilities provided by the established infrastructure, the Kingdom may provide as much as 75% of the funding for some industrial projects.
Speaking on the sidelines of the Gulf Cooperation Council Industrial Cooperation Committee in Doha, the Kingdom’s Minister of Industry and Mineral Resources, Bandar Alkhorayef, pointed to the private sector as the key industry driver.
Technology
AI Could Unlock $27 Billion in Economic Value in Saudi Medical Sector
According to figures from McKinsey & Co., artificial Intelligence promises significant economic and operational benefits for the Saudi health sector.
By automating around 40% of healthcare tasks, AI could unlock between $15 and $27 billion in economic value by 2030. The medical sector is key to the Kingdom’s objective to become a regional technology hub.
Real Estate
Real Estate Driving Saudi Bank Loan Increase
The Saudi Central Bank’s recent figures show that Saudi bank loans increased by 11% in March compared to March 2023. The majority of this growth can be attributed to real estate activities.
Corporate real estate financing grew by a massive 27% in the third quarter of 2024, which is the highest annual growth rate in 10 months. According to Mordor Intelligence, the Saudi Arabian real estate market is valued at $69.51 billion in 2024 and is projected to reach $101.62 billion by 2029.
The Kingdom continues to make great strides toward Vision 2030 by fostering the conditions for an attractive and fertile economic landscape and inspiring innovation and investment across sectors. Bookmark us and come back next week for another round-up of economic news and business moves shaping the Kingdom.
