Saudi Round-Up: Tourism and Digitalization Driving FDI Inflows
Our Saudi Round-Up encapsulates the Kingdom’s ongoing transformation by summarizing the top business news across KSA.
From 16 - 22 July, 2024
This week’s round-up includes general business and economic news, with notable stories in the entertainment, industry & manufacturing, real estate, space, sustainability, technology, and tourism sectors.
General Business and Economy
Saudi Foreign Direct Investment Stock Reaches $218 Billion in Q1 2024
According to the Ministry of Investment, the Kingdom’s foreign direct investment stock increased 6.1% in the first quarter of 2024 compared to the same period last year, reaching $218 billion.
This growth reflects increasing investor confidence in Saudi’s investment ecosystem. Brendan Marais, partner at Kearney Middle East & Africa, noted the Kingdom’s strategic emphasis on attracting FDI and increasing market confidence. KSA is well-positioned to achieve its target of $100 billion in FDI by 2030.
IMF Emphasizes Recent Readjustment Measures to Boost Growth
As the Kingdom reviews its major projects, the International Monetary Fund emphasized that reprioritizing spending, diverting funds and adjusting budgets is normal in a medium-term strategy and welcomed the positive changes.
According to Jihad Azour, IMF Director of the Middle East and Central Asia Department, increased demand, investment, and structural reforms are driving the Kingdom’s non-oil sector growth. Furthermore, the IMF’s World Economic Outlook Update predicts KSA’s output will overtake the global average in 2025.
Tourism
Saudi Arabia’s AlUla becomes first Middle East destination to receive US accreditation
The accreditation comes four years after the region opened its doors to international visitors, underscoring its position as a year-round destination.
Tourist Spending to in Saudi Arabia Hit $40 Billion in First Half of 2024
A $40 billion increase in tourist spending in the first half of 2024 marks a 10% increase in both traveler numbers and expenditure compared to the same period in 2023.
Speaking at a conference about the 2024 Summer Tourism Program, Minister of Tourism Ahmed Al-Khateeb noted that the Kingdom will launch a tourist visa in August to stimulate sector growth. This will support the KSA’s aim to attract 150 million tourists a year by 2030.
Entertainment
Saudi General Entertainment Authority Driving Sector Growth
Saudi’s General Entertainment Authority has been growing the entertainment sector since 2016, transforming it through entertainment complexes, cinema, live music events, and the establishment of the PIF-backed Saudi Entertainment Ventures, which aims to invest $13.3 billion into the sector with international partners.
The Kingdom’s rapid evolution into a global entertainment hub is evidence of its commitment to economic diversification and growth. Saudi Arabia aims to create more than 100,000 jobs and add $64 billion to the entertainment industry by 2030.
Industry and Manufacturing
Saudi Arabia Offers 5 Jew Mining Licenses and Approves National Minerals Program
The Kingdom has offered five new mining exploration licenses covering almost 4800 square kilometers. Three permits are reserved for the Jabal Sayid site in Madinah, while the remaining licenses are for the Al-Hajjar site in the Asir region. All five permits entail minerals such as gold, silver, zinc, copper, and lead.
Furthermore, the Saudi Cabinet’s approval of a new national minerals program linked to the Ministry of Industry and Mineral Resources should meet increased mineral demand locally, regionally, and globally.
These initiatives are intended to boost the exploration and development of the Kingdom’s estimated $2.4 trillion of mineral resources and establish mining as a foundational industrial pillar of the economy in line with Vision 2030.
Real Estate
Alandalus Property Begins $222 Million Project in Makkah
Saudi-based real estate firm Alandalus Property Co. will begin construction of a new commercial center in the Makkah Al-Mukarramah region. The 50,000+ square meter center will include 350 rental units, such as retail sites, hypermarkets, and entertainment and dining areas.
With construction set for completion in early 2027, the development is poised to substantially enhance Makkah and Madinah’s infrastructure, helping them evolve into world-class business and tourism hubs.
Real Estate Brokerage Law Improves Saudi Property Transactions
According to Abdullah bin Saud Al-Hammad, CEO of the Kingdom’s Real Estate General Authority, new real estate safeguards in the Kingdom supported the 17% year-on-year growth of residential and commercial property transactions.
The Real Estate Brokerage law, which was designed to increase Saudi home ownership by 70% by 2030, helped deliver $161.2 billion worth of deals within one year. Residential transactions increased by 18% and commercial transactions grew by 11%.
Space
Saudi Arabia Unveils PIF-Backed Neo Space Group
The Kingdom’s recently unveiled Neo Space Group is a strategic initiative to stimulate the growth of the private space sector.
Spearheaded by the Saudi Space Agency and the Communications, Space, and Technology Commission, the Group aims to develop the local ecosystem, provide innovative space and satellite solutions, and build sustainable value across key segments of the space sector.
Sustainability
Kingdom Set to Become a Global Hub for Renewable Technologies
The Saudi PIF’s new partnerships with TCL Zhonghuan Renewable Energy Technology Co., Envision Energy, and Jinko Solar demonstrate the Kingdom’s investment in diversifying its energy mix toward renewable sources.
These projects will support the Kingdom in becoming a global hub for the export of renewable technologies. Saudi Arabia aims to produce 50% of its electricity from renewable sources by 2030.
Technology
Saudi Government Grows Emerging Tech Adoption by 10%
According to the Emerging Technology Adoption Readiness Index, published by the Digital Government Authority, the Kingdom’s government agencies have made substantial advances in integrating new technologies. The Index shows an increase from 60.35% in 2023 to 70.7% in 2024.
The increase underscores the Kingdom’s progress in leveraging advanced systems to modernize its digital infrastructure and foster sustainable technological development in line with Vision 2030 objectives.
Kingdom Maintains 2nd Place in G20 for ICT Development
Saudi Arabia demonstrates the resilience of its digital infrastructure by maintaining second place out of 170 nations in the UN’s ICT Development Index.
The index considers the inclusivity and effectiveness of each nation’s communication, taking into account the strength of its digital infrastructure. The Kingdom came first in effective communication, supported by a 20% increase in information and communications technology investment compared to 2023.
This week’s round-up underscores the continuing investment, development, and advances across sectors in KSA, stimulating private sector growth and supporting the diversification of the economy in line with Vision 2030 objectives. Bookmark us to keep up with the latest Saudi investment opportunities and the country’s economic, urban, and cultural transformation.
