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Saudi finance minister says non-oil sector grows with economy gradually recovering from pandemic

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Updated 25 November 2021
Ruba Alrashed
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Saudi finance minister says non-oil sector grows with economy gradually recovering from pandemic

Updated 25 November 2021
Ruba Alrashed

RIYADH: The Saudi economy is witnessing a gradual recovery since mid-2020, reflected in the positive growth rates of the non-oil sector, Minister of Finance Mohammed Al-Jadaan said at the Financial Stability Conference on Thursday.

The real non-oil sector growth amounted to 8.4 percent in the second quarter of 2021, led by the private sector, which recorded a growth rate of 11.1 percent, Al-Jadaan said.

Preliminary estimates for the third quarter of this year show that the real private non-oil GDP grew by 6.2 percent, he said. This led to promising results in the public finance performance, he added. 

Al-Jadaan indicated that parts of the Saudi economy have also crossed the pre-pandemic stage, especially with regard to levels of consumption and private investment, which are now much higher than they were before the Covid-19 outbreak.

He added that those sectors related to travel are still suffering from the effects of the pandemic.

The sources of growth depend on economic diversification.

Faisal Al Ibrahim, Saudi minister of economy and planning

Also speaking at the conference, Faisal Al-Ibrahim, minister of economy and planning, said Saudi Arabia now has two challenges: targeting economic diversification, and deepening financial markets to support this diversity.

“We have a very high governance in the financial markets, which in turn do not need more depth, but in order to prepare ourselves for the required diversity,” he added.

In the third quarter of this year, the Kingdom witnessed a 120 percent rise in exports financed by banks, which gave Saudi Arabia a push forward from structural and financial policies aimed at increasing economic diversification, Al-Ibrahim pointed out.

Al Ibrahim argued that that the sources of growth depend on economic diversification and this requires empowering, linking and attracting private sector investment to sectors that have been able to export products and services that are highly competitive and do not depend on the value added by oil.

With regard to the Saudi economy, he said that the Kingdom had entered a period of economic recovery compared to last year.

Topics: economy Saudi Arabia

Lebanon’s economy recovery dependent on global support, stable ceasefire: Moody’s 

Updated 15 sec ago
MIGUEL HADCHITY 
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Lebanon’s economy recovery dependent on global support, stable ceasefire: Moody’s 

Updated 15 sec ago
MIGUEL HADCHITY 

RIYADH: Lebanon’s economy is expected to start recovering this year following a 10 percent contraction in 2024, as the country returns to fully functioning institutions, according to Moody’s. 

On Jan. 9, the country elected former army commander Joseph Aoun as president, and followed that by appointing Nawaf Salam, chief of the International Court of Justice, as prime minister on Jan. 13. 

Aoun’s election ended a leadership void that had persisted since the previous president’s term expired in October 2022. 

“We estimate an economic contraction of 10 percent in 2024 because of the conflict but expect economic activity to start recovering later this year – assuming a permanent cessation of hostilities,” Moody’s said in a commentary. 

The Middle Eastern country’s return to fully functioning institutions will boost the continued enforcement of the ceasefire with Israel, supported by the monitoring role of the US, France and the UNIFIL, the agency added. 

Lebanon’s recovery requires substantial international support, a fact underscored by an international donor conference held in Paris in October. The conference raised $1 billion in pledges, with $800 million allocated for humanitarian assistance and $200 million earmarked for military support. 

These funds are expected to address the immediate needs of over 1.3 million people displaced during the September-November conflict, as well as the $8.5 billion in economic losses incurred, including $3.4 billion in physical damage to infrastructure, as reported by the World Bank. 

While these pledges offer a lifeline, the disbursement of funds will likely be contingent on the government’s adherence to reform commitments under a forthcoming International Monetary Fund program, Moody’s noted. 

These reforms include comprehensive debt restructuring for the government, the central bank, and commercial banks, aimed at ensuring long-term economic recovery and sustainability. 

“Lebanon’s current C rating reflects our expectation that holders of Lebanese eurobonds will recover less than 35 percent of par following the eventual eurobond restructuring,” the agency added. 
 
According to Moody’s, fiscal and investment activity has been sharply curtailed, undermining long-term growth prospects and the provision of public services. 

Tourism and remittances from Lebanon’s diaspora continue to serve as vital sources of foreign exchange, but they are insufficient to address the structural imbalances in the economy. 

Public debt, estimated at 150 percent of the gross domestic product by the end of 2024, remains one of the highest globally, presenting a formidable challenge to fiscal sustainability, noted Moody’s. 

Aoun’s election has been welcomed by international observers as a turning point for Lebanon, which has been mired in political paralysis, economic collapse, and the aftermath of recent conflicts. 

The new president will lead efforts to form a fully empowered government, replacing the current caretaker administration led by former Prime Minister Najib Mikati “that has been operating with limited powers.” 

Aoun’s leadership of the Lebanese Armed Forces was instrumental in enforcing the November ceasefire between Hezbollah and Israel, according to Moody’s. 

The ceasefire has been critical in creating a stable environment for Lebanon’s recovery. Observers note that the role of the armed forces in securing the truce reflects Aoun’s ability to command respect and cooperation from various stakeholders, a quality deemed vital for navigating Lebanon’s complex political landscape. 

Topics: Lebanon lebanon economy Moody's

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NMDC Energy opens advanced fabrication yard in Ras Al-Khair

Updated 34 min 48 sec ago
Mohammed Al-Kinani 
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NMDC Energy opens advanced fabrication yard in Ras Al-Khair

Updated 34 min 48 sec ago
Mohammed Al-Kinani 

JEDDAH: A new fabrication yard with an annual capacity of 40,000 tonnes has opened in Saudi Arabia’s Ras Al-Khair Special Economic Zone, marking a significant development for the Kingdom’s energy sector. 

The facility, built by NMDC Energy — a UAE-based provider of engineering, procurement, and construction services — is equipped with advanced automation and digital technologies, according to a press release. 

Valued at 200 million dirhams ($54.4 million), the new yard marks an important step in strengthening NMDC Energy’s regional presence and supporting Saudi Arabia’s energy infrastructure, it added. 

The project aligns with the country’s Vision 2030 goals, enhancing its capacity to produce energy solutions while driving industrial growth. 

“The inauguration of the Ras Al-Khair yard represents a bold and exciting new chapter for energy cooperation for both the UAE and Saudi Arabia, which will bring vast tangible benefits to both nations,” said Mohamed Hamad Al-Mehairi, chairman of NMDC Energy. 

He added: “We foresee vast opportunities to collaborate and to pursue projects in areas that will maximize the value of the resources in both our nations as well as ensure that the UAE and KSA remain leaders in the regional energy transition.” 

Ras Al-Khair, located in Eastern Province, is a key industrial region that contributes 60 percent of Saudi Arabia’s gross domestic product. The new yard is expected to further drive growth in the region, fostering investment, trade, and job creation in the energy sector. 

The facility was officially inaugurated at the iktva Forum and Exhibition 2025, with Prince Saud bin Nayef bin Abdulaziz, governor of Eastern Province, in attendance. 

Spanning 400,000 sq. meters, the new yard will focus on offshore facilities fabrication and onshore modularization, playing a key role in Saudi Arabia’s growing maritime and offshore cluster. 

The company has reinvested SR5 billion ($1.33 billion) in the Saudi economy over the past five years, supporting the Kingdom’s economic priorities and diversifying its industrial base. 

“At NMDC Energy, we understand that the essence of Saudi Vision 2030 is that it seeks a strong, thriving and stable Saudi Arabia. That’s why we’re looking forward to bringing 51 years of experience to create new opportunities for prosperity for both KSA and the UAE, as well as supporting new and existing clients across the wider region,” said Ahmed Al-Dhaheri, CEO of NMDC Energy. 

He added: “Through our projects and collaborations in Ras Al Khair, we can build upon Saudi’s national priorities by helping to diversify the national economy, creating skilled jobs and harnessing the full potential of the skilled labor force.” 

Topics: NMDC Energy Ras Al-Khair

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Mada cards propel Saudi e-commerce to $4.65bn, up 29%

Updated 34 min 56 sec ago
Dayan Abou Tine
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Mada cards propel Saudi e-commerce to $4.65bn, up 29%

Updated 34 min 56 sec ago
Dayan Abou Tine

RIYADH: Saudi Arabia’s e-commerce sales using Mada cards reached SR17.44 billion ($4.65 billion) in November 2024, a year-on-year growth of 29.4 percent, according to recent data from the Saudi Central Bank.

This figure includes payments for online shopping, in-app purchases, and e-wallet transactions, but excludes payments made through credit cards such as Visa and MasterCard.

The rise in e-commerce activity aligns with Saudi Arabia’s goal to make digital commerce 80 percent of the retail sector by 2030, with 70 percent of transactions conducted online by the same year.

Mada, the Kingdom’s national payment card system, supports both debit and prepaid services within its network. The cards utilize near-field communication technology for contactless payments, enabling secure transactions at both physical retailers and online. Mada cards play a crucial role in Saudi Arabia’s transition to a cashless economy.

In addition to the surge in sales, the number of e-commerce transactions also saw a significant increase, rising by 26.49 percent year on year to nearly 99 million transactions in November alone.

The spike in e-commerce activity in Saudi Arabia can be attributed to a combination of demographic and economic factors. With 60 percent of the population under the age of 30, the Kingdom is witnessing a growing trend toward digital consumption, largely driven by a tech-savvy youth demographic eager to embrace online shopping.

Furthermore, the expanding middle class and the rising influx of expatriates are contributing to greater financial capacity, while the growth of dual-income households further bolsters spending power.

This evolving economic landscape, paired with shifting consumer expectations for personalized and seamless digital experiences, is driving businesses to innovate and enhance their online offerings.

Ongoing infrastructure development—including the construction of new cities and modern shopping centers—adds to the momentum. As these trends continue, Saudi Arabia’s e-commerce sector is poised for substantial growth, reshaping the Kingdom’s retail environment in the coming years.

According to the latest data from the Ministry of Commerce, the Kingdom’s e-commerce sector saw a total of 40,953 businesses registered by the fourth quarter of 2024, reflecting a 10 percent year-on-year increase. Riyadh led in business registrations with 16,834, followed by Makkah and the Eastern Province. This uptick is a testament to Saudi Arabia’s push toward a digitally-driven, diversified economy, with e-commerce playing a central role in the transformation.

In parallel, the fintech sector also experienced notable growth, with the Ministry of Commerce reporting a 12 percent increase from the previous year. A total of 3,152 new fintech business registrations were recorded in the fourth quarter of 2024, highlighting the sector’s expanding role in supporting secure and seamless online transactions.

The growth of e-commerce and fintech is part of a broader trend of innovation across various sectors in Saudi Arabia. Recent reports highlight significant advances in cloud computing services, solar panel manufacturing, and real estate development—all in alignment with the goals of Vision 2030, which seeks to diversify the economy and promote sustainability.

With its rapidly expanding digital economy, Saudi Arabia is well-positioned to lead in the future of global e-commerce, as the country continues to embrace technological innovation and sustainability.

Topics: Mada e-commerce Digital

Saudi Arabia champions global collaboration and innovation at Future Minerals Forum

Updated 14 January 2025
Nadin Hassan
Miguel Hadchity
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Saudi Arabia champions global collaboration and innovation at Future Minerals Forum

Updated 14 January 2025
Nadin Hassan Miguel Hadchity

RIYAHD: Saudi Arabia has reaffirmed its commitment to addressing global challenges and fostering transformative change during a ministerial roundtable at the Future Minerals Forum.

Hosted in Riyadh from Jan. 14 to 16, the event is set to welcome government representatives from up to 90 countries, including 16 G20 nations, alongside industry leaders, NGOs, and international organizations in what is now its fourth edition.

This year’s gathering highlighted the need for significant investments of $6 trillion over the next decade to meet rising demand in the mining sector amidst challenges such as commodity market volatility and workforce gaps. 

Opening the roundtable, Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef emphasized the forum’s evolution as a collaborative platform for crafting actionable solutions to pressing global challenges. 

“Today, we embark on this year’s future reform, a moment to reflect on our shared achievements and set the stage for a future of meaningful impact. The evolution of this gathering is testament to the growing recognition of its importance and impact,” Alkhorayef said.

The minister also highlighted the diversity and depth of representation at this year’s event, which included government representatives and participants from the private sector, international organizations, and NGOs.

Representatatives from 89 countries gather at FMF. X/@FutureMineral

The roundtable addressed key challenges in the sector, including developing a strategic framework to harness the mineral wealth of Africa, West, and Central Asia for economic growth. 

It also focused on promoting sustainability by setting responsible supply priorities aligned with local conditions and enhancing transparency through supply chain certification. 

Additionally, the creation of Regional Centers of Excellence was highlighted to boost investments, develop skilled talent, and accelerate technological innovation.

Alkhorayef acknowledged the volatility in commodity markets and stressed the importance of stakeholder engagement and addressing the talent gap caused by an aging workforce.

Aligned with its Vision 2030 goals, Saudi Arabia is positioning the mining sector as a catalyst for sustainable economic growth. 

The Kingdom’s mineral wealth is estimated at $2.5 trillion, with untapped deposits of phosphate, gold, zinc, and copper,

The sector’s contribution to GDP is expected to increase to between $70 billion and $80 billion by 2030 from $17 billion currently, creating over 200,000 jobs. 

Topics: Future Minerals Forum Saudi Industry and Mineral Resources Minister Bandar Alkhorayef

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Egypt economy set for 4% growth despite regional tensions, says minister

Updated 14 January 2025
REEM WALID 
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Egypt economy set for 4% growth despite regional tensions, says minister

Updated 14 January 2025
REEM WALID 

RIYADH: Egypt’s economy is on track to grow 4 percent in the current fiscal year, driven by ongoing structural reforms, according to the minister of planning and economic development.

In a meeting with the National Press Authority, Rania Al-Mashat confirmed the country was still on course to hit that figure — originally flagged in April — despite output from the Suez Canal being affected by regional tensions.

The minister also used the meeting to outline Egypt’s plans to enhance its investment climate, with the government seeking $4.2 billion in macroeconomic support from global partners.

This comes against a backdrop of a surge in foreign direct investment inflows, which reached a record $46.1 billion in the 2023/2024 fiscal year, compared to just $10 billion the previous year, according to data released by the Central Bank of Egypt. 

Al-Mashat also emphasized the government’s commitment to prudent investment management, highlighting that the public investment budget for the current year is capped at 1 trillion Egyptian pounds ($19.78 billion), with a focus on completing projects that are at least 70 percent finished, according to a release. 

Between 2020 and 2024, the private sector secured $14.5 billion in concessional development financing from global partners. For the first time, soft international financing for the private sector has surpassed government financing in 2024, Al-Mashat noted. 

The minister also disclosed that negotiations are underway with the EU and other international partners for a second phase of macroeconomic support, totaling €4 billion ($4.10 billion) in budget aid, alongside €1.8 billion in investment guarantees. 

She highlighted Egypt’s renewable energy progress, with the National Platform for the “NWFE” program securing $3.9 billion in financing for renewable projects. The program is set to add 4,200 megawatts of clean energy capacity and phase out 1,200 MW of thermal power generation. 

Al-Mashat also outlined the ministry’s long-term vision following the merger of planning, economic development, and international cooperation portfolios. The aim is to drive sustainable growth and improve the quality and quantity of economic development in line with Egypt’s Vision 2030 and other strategic frameworks. 

The government is currently drafting the 2025/2026 Socio-Economic Development Plan, aligned with the mid-term budget framework. She pointed out that efforts to restructure the National Investment Bank and manage debt with key institutions, such as the National Bank of Egypt and Egypt Post, are also ongoing. 

Despite stringent controls on investment spending, human development remains a priority. Al-Mashat noted that nearly 50 percent of the 2024/2025 investment plan — amounting to nearly 2 trillion pounds — will go toward public investments, with a significant portion dedicated to human development and water and sanitation projects. 

The minister concluded the meeting by pointing out the role of 54 joint committees that the ministry oversees, which are designed to promote economic cooperation and opportunities with other nations. 

Topics: Egypt economy

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