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Saudi Round-Up: A Multi-Sector Approach for Economic Evolution

Weekly Roundups

16 Apr 2024

AstroLabs Team

Today’s round-up is a special edition comprising two weeks. Find out the most significant news across general business and the economy, automotive, entertainment, fintech, industry and manufacturing, real estate, sustainability, technology, and tourism.

From March 26 to April 1, 2024

General Business & Economy

A 59% Surge in Saudi Commercial Registrations

According to the quarterly business sector bulletin, there were 104,000 commercial registrations in 2024 Q1. This growth of 59% correlates with the Ministry of Commerce issuing 65,363 permits during the same period.

With total registrations at 1.45 million, the increase underlines Saudi Arabia’s commitment to Vision 2030 and economic diversification by various means, including by stimulating foreign investment.

China Leads Greenfield Foreign Direct Investment in the Kingdom

According to Emirates NBD, China’s green-field investments in Saudi Arabia totaled $16.8 billion in 2023. This marks a 1.02% rise since 2022. A massive $5.6 billion of this investment was directed to the manufacturing of original automotive equipment.

During the same period, total green-field FDI in the Kingdom grew by 110% to 28.78 billion. The tourism sector received $227 million in investments. This news aligns with the Kingdom’s target of attracting more than $100 billion in foreign direct investments by 2030.

Saudi Non-Oil Private Sector Growth Reaches Six-Month High

The Kingdom’s Purchasing Managers’ Index of 57 shows steady growth in the non-oil private sector, surpassing that of UAE, Kuwait, and Egypt. S&P Global reported robust improvement in the Kingdom’s non-oil private sector at the end of the first quarter of 2024.

Bolstering the non-oil sector is vital for the Kingdom’s continuing economic diversification. Riyad Bank’s chief economist emphasized that the increase in business activity contributed to the most significant increase in six months.

Saudi Arabia’s Economic Landscape Evolves With 18 Economic Concentration Requests

The General Authority for Competition’s (GAC) economic concentration requests demonstrate global interest and robust business activity in the Kingdom. Moreover, Saudi Arabia saw an influx of deals across various sectors, including with France’s SIB International and the UK’s Stratasys Solutions.

The GAC continues to spur growth in the Kingdom’s diverse economic investment landscape by ensuring strong market performance and fostering consumer and business confidence.

KEC Signs 2 Deals Worth $78 Million for Al-Alya Project

Knowledge Economic City Company has signed deals with Elkhereiji Commerce and Contracting Company worth $77.92 million. The agreement will see KEC deliver 396 residential apartments for the Al-Alya mixed-use project.

Al-Alya is a key development in KEC, comprising hospitality, housing, offices, and retail. The deal furthers the project’s aim to help local and international businesses and entrepreneurs work in Madinah while also enhancing quality of life.

Automotive

Kingdom Leads Soaring Electric Vehicle Market

Saudi Arabia is leading the transport revolution. After the launch of the Kingdom’s first automotive brand, Ceer, other EV brands including Lucid and Aston Martin explored the Kingdom with interest.

Goldman Sachs expects EVs to comprise almost half of global car sales by 2035. Furthermore, it forecasts that worldwide EV sales will rise from 2 million units in 2020 to 73 million units by 2040.

Saudi Arabia, which aims for 30% of all Riyadh’s vehicles to be electric by 2030, has developed an EV market that is primed for growth while able to contribute to a more sustainable future.

Entertainment

34% Rise in Entertainment Event Organization Company Registrations

According to figures from the Ministry of Commerce, registered companies in the Kingdom totaled 9,445 in the first quarter of 2024. Riyadh led the way with 4,301 permits, followed by Makkah, Eastern Province, Madinah, and Asir.

Registered electronic game development firms in Saudi increased by 59% to 4,371 in the first quarter of 2024. Additionally, registered electronic delivery services firms grew by 61% to 4,699 companies during the same period.

These figures highlight the flourishing e-commerce sector in Saudi and demonstrate successful alignment with the country’s goals as per Vision 2030.

Fintech

Saudi Asset Management Industry Grows by 58.6% in Four Years

The 58.6% rise in the asset management activity revenues of Saudi’s capital market institutions represents unprecedented growth. This increase to $1.12 billion underlines the diversity and professional management of financial resources within the Kingdom. Investment funds in the Kingdom reached 1,285 at the close of 2023, an 11.7% growth compared to 2019.

The Saudi Capital Market Authority is working to establish increasingly flexible structures and new funds in line with Vision 2030 objectives, making the Kingdom more investment-friendly, competitive, and efficient.

Saudi POS Transactions Increased by 20% to $14.33 Billion in February

The Saudi Central Bank released figures showing that payments made via point-of-sale terminals in the Kingdom have increased by 20% to $14.33 billion. Most POS spending was on beverages and food (15.7%), followed by restaurants and cafes (15%).

This significant increase in POS payments demonstrates the Kingdom’s continual digital transformation and underscores the country's investment in its technological future.

Industrial and Manufacturing

Saudi Incentive for International Firms in the Mining Sector

The Mining Exploration Enablement Program invites international businesses to register and contribute to mining exploration by focusing on uncharted territories. Successful firms will be expected to encourage investment and foster growth locally.

Additionally, the Ministry of Industry and Mineral Resources is seeking bids for six new high-value exploration opportunities. This is part of the Kingdom’s Accelerated Exploration Initiative unveiled in 2022.

With Saudi’s mineral wealth estimated at $2.5 trillion, the exploration initiatives align with the Kingdom’s efforts to transform mining into the third pillar of national industries, as per Vision 2030.

72% Rise in Saudi Industrial Licence Issuance

The Saudi industrial sector has grown with an additional 118 licenses issued in February, spanning food products production, metal goods, non-metallic minerals and non-ferrous metal manufacturing, chemical production, and rubber and plastics.

The total number of licenses the Ministry of Industry and Mineral Resources has issued reached 270 at the end of February, totaling $500 million. This demonstrates the extent of change within the industrial sector and Saudi’s promising investment and economic environment.

63% Growth in Saudi Industrial Sector’s New Investments to $3.99 Billion

The 63% rise in new investments in Saudi Arabia’s industrial sector is further proof of the industrial success stories throughout the Kingdom.

Additionally, the digital transformation index rose 9% to 85.77%, there was a 13% increase in new manufacturing establishments and a 6% increase in new factories.

The significant expansion of the Kingdom’s industrial infrastructure demonstrates the Kingdom’s commitment to bolstering the economy, providing jobs for the local population, and investing in manufacturing innovation and advancement.

Tourism

Al Akaria Signs Multiple Deals to Boost Transportation, Real Estate, and Tourism

The deal between Saudi Real Estate Company aka Al Akaria and Diriyah Gate is worth $192.5 million. While work has started on the PIF-backed Riyadh metro project, the financial impact is expected to be felt in the first quarter of this year.

Al Akaria has also signed deals with Saudi Real Estate Construction Company aka Tamear for the Tilal Al Riyadh mixed-use project and with Marriott International to open a new 280-key flagship hotel.

These moves demonstrate Al Akaria and the Kingdom’s ongoing efforts to strengthen the country’s position as an international tourist destination with world-class logistics, real estate, and facilities.

Diriyah Square to Be Unveiled at Paris’ World Retail Congress

Diriyah is set to reveal a lifestyle hub comprising over 400 retailers and 100 restaurants and cafes. The news will be announced at the World Retail Congress in Paris, which runs from 16-18 April.

Jerry Inzerillo, Group CEO of Diriyah Co, expressed excitement regarding the potential for international investors and stakeholders to help shape this vision of the future. He also underscored how the development symbolizes the Kingdom’s commitment to economic growth, creativity, and innovation.

This round-up demonstrates the Kingdom’s commitment to global and local economies, making Saudi Arabia an increasingly exciting place to work, live, invest, and visit. Bookmark us and join us next week for another bird’s-eye view of the cultural, digital, and economic transformations across the Kingdom.

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