Saudi Roundup: Boosting Private Investments and Non-Oil Growth

This week’s round-up features Saudi’s most impactful news in general business and the economy, industry and manufacturing, healthcare, real estate, space, and sustainability.

From 28 May to 3 June 2024

General Business and Economy

Innovation Drives Saudi Investment During the First Quarter of 2024

Saudi Arabia demonstrates its strong economic environment by securing the top position in terms of Total Value of Venture Investment and Trust in Government Index and second place in the World Competitiveness Ranking for Cyber Security and the PCSI Consumer Sentiment Index.

Technology, innovation, and incentives have enhanced Saudi’s global reputation as an investment hub. One such example is the Tourism Investment Enabler Program, which aims to attract $11.2 billion in investments and create 120,000 new jobs by 2030.

Saudi Economy Demonstrates Resilience and Growth

During discussions at the Council of Economic and Development Affairs, the Ministry of Economy and Planning’s report on Saudi Arabia’s performance in the first quarter of 2024 highlighted the economy’s resilience. Non-oil sectors continue to do well while inflation of 1.5% is low compared to the rest of the world.

According to the report, 87% of Vision 2030 initiatives were either on schedule or had been attained by 2023. The Kingdom is on track with its ongoing transformation efforts.

Saudi GDP Predicted to Rise 2.5% in 2024

The World Bank’s Spring 2024 Gulf Economic Update predicts a 2.5% increase in Saudi GDP. This is largely attributable to non-oil private activities, which are expected to increase by 4.8% this year.

Saudi PIF Named the World’s Most Valuable Wealth Fund

According to the most recent report from Brand Finance, the UK-based strategic consultancy, the Saudi PIF is the world’s most valuable sovereign wealth fund. With a value of $1.1 billion, it has topped the list due to its diverse investment strategy, dependability, brand awareness, and commitment to economic growth.

The PIF has been pivotal in the country’s efforts to diversify the economy away from its traditional reliance on oil. It aims to have $2 trillion in assets under management by 2030.

Kingdom Issues Licenses for 127 Regional Headquarters in First Quarter

A report from Saudi Arabia’s Ministry of Investment shows that 127 permits were issued for the establishment of regional headquarters, marking a 477% year-on-year increase.

The influx of international firms setting up HQs in the Saudi capital reflects its generous perks and the robust economic environment.

In addition, the Ministry of Investment processed 445 investor visit visa applications and closed 64 deals. The lion’s share of investment licenses was attributed to the construction and manufacturing sectors.

Saudi IPOs Attract Unprecedented $176 Billion Worth of Investor Orders

According to Bloomberg, the $176 billion in orders for Saudi IPOs beats the record Saudi Aramco set in 2019.

Analysis by Dubia International Financial Center points to 27 Saudi companies aiming to list on the Kingdom’s stock market, the Tadawul. Demand is likely being driven by an influx of hedge fund managers, digital transformation, retail investors, and supportive banking practices.

Industry and Manufacturing

Alat and Lenovo Collaborate for $2 Billion Saudi Manufacturing Hub

Saudi PIF-owned Alat’s partnership with electronics giant Lenovo is driving Saudi’s ambition to position itself as a sustainable manufacturing hub.

The Chinese firm is issuing $2 billion in convertible bonds, will establish regional headquarters in Riyadh, and will develop a new production site in the Kingdom that prioritizes smart, sustainable manufacturing.

Alat anticipates the creation of 60,000 jobs and $10 billion of cumulative gross domestic investment impact by 2030.

Real Estate

Saudi Residential Real Estate Market Surges 77% in First Quarter

According to CBRE, the global consultancy firm, Saudi Arabia’s residential market has seen a 77% annual increase in sales transactions in the first quarter of 2024.

While the commercial real estate sector has been performing well recently, the residential sector is also experiencing a surge in demand, underlining the strong performance of the real estate sector as a whole.

Saudi Firms Launch $365 Million Eastern Province Real Estate Fund

Alinma Investment and Mohammed Al-Nahdi Real Estate have announced the $365 million Alinma-Al-Nahdi Real Estate Fund dedicated to developing more than 1.6 million square meters of the Eastern Province.

The deal reflects the two firms’ commitment to unique projects that address Saudi housing needs, as outlined in Vision 2030.

Space

Local Economic Benefits of Saudi Space Exploration

Amar Vora, Head of Space at Serco Middle East, noted that space technologies, including communications, agriculture, mobility, and the environment, are increasingly important parts of addressing global challenges and economic growth.

The value of the global space economy could reach $1.8 trillion by 2035. The Saudi Space Agency’s National Space Strategy is expected to lead to significant job creation, including work for support staff, engineers, and manufacturers.

Sustainability

Saudi Leads Solar Revolution

Recent analysis from Rystad Energy points to Saudi Arabia’s world-record-breaking low-cost solar electricity, which reached $10.4 per megawatt-hour.

Saudi receives over 2,000 kilowatt-hours per square meter annually in solar radiation. The country’s vibrant economic environment, which includes large-scale projects and declining hardware prices, supports the increased use of solar power.

Lucid and EVIQ Collaborate to Enhance Electric Vehicle Infrastructure

The agreement between Lucid and Electric Vehicle Infrastructure Co. to activate high-speed public charging infrastructure is set to facilitate and fuel the mass adoption of electric vehicles in line with Vision 2030 and the Saudi Green Initiative.

From sustainability to space travel, Saudi Arabia continues to develop robust infrastructure and stimulate the economy to support digital and economic transformation. Bookmark us for another summary of the week’s top business and economic moves across Saudi Arabia.