Saudi Round-Up: Energy Investments Ticking Up
With significant progress in sectors such as energy, tourism, and technology, the Kingdom exemplifies the successful realization of Vision 2030 objectives
From 23 September to 30 September 2024
General Business and Economy
Saudi Arabia’s Economy Expected to Grow 5.3% in 2025
Saudi Arabia's GDP is expected to grow by 1.4% in 2024, accelerating to 5.3% in 2025, according to S&P Global's latest analysis.
The credit rating agency highlights that anticipated rate cuts by the US Federal Reserve will benefit emerging markets like Saudi Arabia, which boasts strong growth fundamentals and increased capital inflows.
S&P Global also forecasts 4% growth in 2026 and 3.6% in 2027, with inflation rates averaging 1.8% in 2024 and 1.6% in 2025. Unemployment is projected to decline to 4.7% this year and 4.4% next year, reflecting the positive impact of ongoing social, economic, and political reforms.
Saudi Arabia Attracts $144 Billion in Foreign Investments Under Vision 2030, Eyes $150 Billion in Exports by 2030
According to the Minister of Industry and Mineral Resources, Bandar Alkhorayef, Saudi Arabia has attracted $144 billion in foreign investments as part of its Vision 2030 initiative. This announcement was made during a promotional event in New York for the upcoming Multilateral Industrial Policy Forum (MIPF 2024) in Riyadh.
The Kingdom aims to further drive growth by expanding industrial exports to $150 billion by 2030 and tripling the industrial sector's contribution to GDP to $241 billion. Foreign investments surged to $679 billion by the end of Q1 2024, a 6% increase from the previous year.
The Kingdom's Non-Oil Exports Soar 19% in July 2024, Driven by Re-Exports Surge
Saudi Arabia's non-oil exports, including re-exports, increased by 19% in July 2024 compared to the same period last year. This growth highlights the Kingdom's successful efforts to diversify its economy away from oil dependence.
Excluding re-exports, national non-oil exports increased by 6.5%, while re-exports alone soared by 78.4%. Total merchandise exports grew by 2%, despite a 3.1% decline in oil exports, reducing oil's share of total exports from 77% to 73.1%.
Additionally, the ratio of non-oil exports to imports improved to 33.7% from 31.9%, driven by faster growth in non-oil exports compared to imports.
Saudi Unemployment Rate Drops to 3.3% in Q2 2024
In a recent report, the General Authority for Statistics (GASTAT) revealed that Saudi Arabia’s overall unemployment rate fell to 3.3% in the second quarter of 2024, marking a 0.2 percentage point decrease from the previous quarter and a 0.8 percentage point decline year-on-year.
Among Saudi nationals, the rate decreased to 7.1%, which supports Vision 2030’s objectives to improve job opportunities and stimulate economic growth. Additionally, the launch of the Jadarat employment platform and ongoing reforms are expected to continue driving improvements in the labor market.
Saudi Arabia Prepares for COP16 with Ambitious Green Initiatives and Major Environmental Commitments
Saudi Arabia is intensifying its preparations for the UN Convention to Combat Desertification’s COP16. The country is hosting its first Advisory Council meeting during the UN General Assembly in New York.
The Kingdom has launched the Saudi Green and Middle East Green Initiatives, aiming to cut regional carbon emissions by 60%, plant 50 billion trees, and increase protected land coverage to over 30%. Additionally, Saudi Arabia plans to reduce global carbon emissions by more than 4% through renewable energy projects, targeting 50% of its energy mix by 2030.
E-commerce
Consumers in Saudi Arabia Dial-up Electronics Spending, latest POS data Reveals
Saudi consumers spent SR247.2 mi llion ($65.8 million) on electronics and SR292.4 million on hotels from September 15-21. This marks an 18.3% and 18.2% increase respectively compared to the previous week, according to the Saudi Central Bank (SAMA).
These sectors led the growth, but restaurants and cafes recorded the highest spending shares, with SR1.77 billion and SR1.67 billion respectively.
Saudi Arabia’s Top 10 Startups Show Rapid Growth and Innovation
According to LinkedIn’s annual Top Startups list, Saudi Arabia’s top 10 startups are demonstrating impressive growth and strong innovation across key sectors, including digital security, convenience apps, and business solutions.
Saudi Arabia leads venture capital funding in the Middle East and North Africa, with $412 million invested in the first half of 2024. Nabila Rahal, MENA news editor at LinkedIn, emphasized that these startups are making substantial impacts, breaking into new industries, and contributing to the country’s economic diversification through technological and innovative solutions.
Industry and Manufacturing
Saudi Arabia’s SPARK Attracts Over $3 Billion from 60+ Investors
Saudi Arabia’s King Salman Energy Park (SPARK) has secured investments exceeding $3 billion from more than 60 investors since its establishment in 2018.
Currently, seven factories are operational with 14 more under construction, aiming to develop SPARK into a global hub for energy, industry, and technology. Covering 50 sq. km between Dammam and Al-Ahsa, the fully integrated industrial ecosystem plans to house around 300 facilities across three phases.
Led By Saudi Arabia and UAE, the GCC Retail Sector is Projected to Grow 4.6% Annually by 2028
The Gulf Cooperation Council's retail sector is expected to grow at an annual rate of 4.6% from 2023 to 2028, driven primarily by the UAE and Saudi Arabia.
Retail sales in the GCC are projected to increase from $309.6 billion in 2023 to $386.9 billion by 2028. The UAE and Saudi markets are set to expand by 5.4% and 5.1% respectively reaching $161.4 billion and $139.1 billion.
Factors such as population growth, rising per capita income, and increased tourism are fueling this expansion.
Saudi Aramco and China National Building Material Group Announce Strategic Collaboration
Saudi Aramco has entered a five-year partnership with China National Building Material Group (CNBM) to explore advanced materials and manufacturing opportunities in Saudi Arabia. The agreement includes plans to establish facilities for hydrogen storage tanks, lower-carbon building materials, and energy storage solutions.
The partnership builds on Aramco’s longstanding three-decade relationship with CNBM and follows the 2021 launch of the Nonmetallic Excellence and Innovation Center in Beijing.
Sustainability & Energy
ACWA Power and Saudi Aramco Secure SAR 12 Billion for Three Major Solar PV Projects
ACWA Power’s subsidiary, Badeel, and Saudi Aramco Power Co (SAPCO) announced the financial closure of three solar photovoltaic (PV) projects valued at SAR 12 billion ($3.2 billion) on September 29.
These projects are part of Saudi Arabia’s National Renewable Energy Program, overseen by the Ministry of Energy, and align with the Public Investment Fund’s (PIF) commitment to developing 70% of the Kingdom’s targeted renewable energy capacity by 2030.
Saudi Arabia to Add 4,500 MW of Renewable Energy Through Sixth Round of Solar and Wind Projects
Saudi Arabia is set to expand its renewable energy capacity by 4,500 megawatts (MW) following the issuance of a request for qualifications by its procurement agency for the sixth round of solar and wind projects.
Key initiatives include the 1,500-MW Dawadmi wind project in the Riyadh region, the 1,400-MW Najran solar project, and two 600-MW solar projects in Jazan (Samtah and Al-Darb). Additionally, the 400-MW Sufun solar project in Hail will contribute to the grid.
Technology
Saudi Arabia's Data Center Capacity to Exceed 1,000 MW in Five Years, Says MIS CEO Abdullah Al Ghamdi
Saudi Arabia is set to significantly expand its data center capacity and exceed 1,000 megawatts (MW) over the next five years.
Currently, the Kingdom has a capacity of approximately 250-300 MW, and MIS expects to surpass the initial 120 MW target ahead of schedule due to strong demand and rapid market growth.
Additionally, the Saudi Data Center Fund 1 aims to provide up to 120 MW, with 32 MW already implemented, and plans to expand to 96 MW with an investment of SAR 2-2.5 billion.
Tourism
Saudi Arabia’s Leisure Tourism Sector Surges by 656% Since 2019 As the Country Welcomes 17.5 Million International Visitors in 2024
The Ministry of Tourism stated that Saudi Arabia’s leisure tourism sector has experienced an extraordinary 656% growth since 2019, welcoming 17.5 million international visitors in 2024.
The introduction of the first tourism visa in 2019 significantly boosted international tourism, helping Saudi Arabia achieve its Vision 2030 goal of welcoming 100 million tourists by 2030 seven years ahead of schedule in 2023.
