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Construction and Sports Sectors Power Economic Growth

Saudi Weekly Roundups

2 Jul 2024

Maha Anwar

This week’s news round-up includes highlights in the automotive, industry and manufacturing, sports, sustainability, and technology sectors.

From 25 June to 1 July 2024

General Business and Economy

Kingdom’s FDI grows 5.6% in Q1 2024

According to the General Authority for Statistics, Saudi Arabia’s net foreign direct investment inflow reached $2.53 billion in the first three months of 2024. This marks a 5.6% increase compared to the same period last year, underscoring the Kingdom’s ongoing appeal to international investors.

In its analysis of 2023, the Kingdom’s Capital Markets Authority reported 7.7% growth in net foreign investments in the Saudi capital market. This valuation of $52.78 billion was driven by new regulations, increased market listings, and improved global financial rankings.

The National Investment Strategy and Vision 2030 have led to legal, economic, and social changes to enhance the nation’s investment environment and economic growth.

Saudi Economic Environment Attracts Mizuho and EY HQs

Mizuho Financial Group, the Japan-based global banking group, and EY, formerly known as Ernst & Young, the multinational professional services firm, wish to locate their regional headquarters in Riyadh.

They hope to join more than 120 international firms whose regional headquarters the Saudi government has approved to relocate to Saudi Arabia in the first quarter of 2024, including Boeing and Amazon.

Economic Transformation Brings Global Logistics Firms to Kingdom

Industry analysts, including Hakan Lanfredi of Dussmann Group, believe that Saudi Arabia presents significant opportunities for international logistics firms wishing to establish or expand operations.

The Kingdom has a favorable geographical location, world-class infrastructure, and increasing logistics needs, including major opportunities linked to Expo 2030 and the 2034 FIFA World Cup.

Saudi PIF Revenues Grow 100% to over $88 Billion in 2023

The Saudi PIF’s revenues more than doubled from $44 billion in 2022 to $88.22 billion in 2023, marking a profit of $36.81 billion.

This increase can be attributed to improvements in multiple sectors, notably banking, telecommunications, and gaming. As the PIF approaches $1 trillion in assets under management, it remains a key vehicle for Vision 2030’s objectives for economic transformation.

Automotive

Kingdom Experiencing Rapid Automotive Sector Growth

The Saudi automotive sector, which currently sells 600,000 new cars per year, grew 23% in 2023 compared to 2022, outpacing the global average growth of 10%.

Government-led initiatives, a growing young population, and a massive influx of expatriates are boosting Saudi Arabia’s automotive industry. This helps the nation realize its ambitions to become a global automotive player and a manufacturing hub and to achieve 30% electric vehicle penetration as part of Vision 2030.

Construction

Saudi Construction Sector to be the Largest Worldwide

Saudi Arabia is set to become the largest construction market in the world” by 2028, according to the global real estate consultancy firm, Knight Frank.

The UK-based real estate consultancy expected the total value of construction contracts in the Kingdom to reach $181.5 billion by the end of 2028.

Industry and Manufacturing

National Mining Sector Grows with Exploration Licensing Surge

The Ministry of Industry and Mineral Resources awarded 1,000 square kilometers to six companies during its fifth round of exploration licensing.

The Saudi mining sector has grown 138% since the Mining Investment Law of 2021. The Kingdom granted 19 permits in 2023, compared to 8 in 2022, to boost production and exploit mineral wealth valued at $2.51 trillion.

Sports

Saudi Sports Sector to Reach 22.4 Billion By 2030

At the UK-Saudi Sports Investment and Innovation Forum, held on the sidelines of the UK-Saudi Sustainable Infrastructure Summit, Basim Ibrahim, Director of Sports Sector Investment Development at the Ministry of Investment, highlighted the growing Saudi sports market, which is valued at around $8 billion.

According to Mohammed El-Nemer, Vice Chairman of the Saudi British Joint Business Council, the Saudi sports and entertainment sector experienced annual growth of 12% between 2018 and 2023. Driven by Vision 2030, Saudi Arabia has become a global destination for athletes, renowned sports competitions, and investments.

Aramco Gaming Arena Supports Esports World Cup

The oil giant Aramco, the main partner of the Esports World Cup, is extending its sponsorship of one of the world’s most significant esports events with an arena of hyper-realistic simulators.

PwC anticipates a global gaming industry worth $320 billion in 2026. The Kingdom’s National Gaming and Esports Strategy aims to add $13 billion to GDP by 2030. Aramco’s involvement promotes economic development and diversification in line with Vision 2030.

Sustainability

$3.3 Billion Solar Deal Advances Saudi Renewable Goals

Saudi Power Procurement Co. finalized deals for three new solar projects valued at $3.3 billion with ACWA Power Co., PIF-owned Water & Electricity Holding Co. (also known as Badeel), and Aramco Power.

The Kingdom’s National Renewable Energy Program aims for 50% of the nation’s energy to come from renewables by 2030, in line with Vision 2030.

Renewable Energy Sector Driving UK Interest in Saudi Arabia

The Kingdom’s renewable energy and sustainable infrastructure attracted strong interest from UK investors at London’s UK-Saudi Sustainable Infrastructure Summit on 24 June, which highlighted opportunities at NEOM, Qiddiya, ROSHN, Diriyah, and the Red Sea Project.

These innovative giga-projects echo the Kingdom’s commitment to reducing carbon emissions by 278 million tonnes per year by 2030 while increasing its ability to generate renewable energy by 50%.

Discussions at the summit emphasized Saudi-British cooperation in developing sustainable infrastructure, net-zero emission targets, and the importance of public-private partnerships.

Saudi Plays Key Role in $100 Billion Future Global Carbon Credit Market

According to consultancy firm Oliver Wyman, the global market for carbon removal credits could reach $100 billion per year by 2030. Saudi Arabia’s initiatives, including the Regional Voluntary Carbon Market Co., encourage market growth.

Carbon trading is critical for reducing the impact of climate change, and the Kingdom is stepping up to the challenge of scaling carbon removals to meet accelerating market growth.

Saudi Renewable Energy Advances with GE Vernova Gas Turbine

GE Vernova’s highly efficient H-Class gas turbines are hydrogen-ready and designed to support renewable energy transition.

The rollout of these turbines for the Jafurah plant marks a significant advance for the Kingdom’s energy sector, economic diversification, and achieving Saudi Vision 2030 objectives.

Technology

Kingdom Pursues Global Leadership in AI

Faisal Al-Ibrahim, the Kingdom’s Minister of Economy and Planning, underscored the nation’s commitment to global leadership in artificial intelligence at the World Economic Forum’s 15th Annual Meeting of the New Champions, which began on 25 June.

The National Strategy for Data and Artificial Intelligence, created in 2020, aims to attract $20 billion in investments by 2030.

This week’s Saudi Round-Up confirms the Kingdom’s multifaceted approach to achieving Vision 2030 objectives, with significant deals, moves, and affirmations in multiple sectors. Join us next week by bookmarking us and checking in for the latest economic and business developments across the Kingdom.

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