RIYADH: The Middle East and North Africa’s exposure to the latest US tariffs will be largely indirect, driven by weaker global growth prospects and softening energy prices rather than direct trade effects, a new analysis showed. 

In its latest report, Moody’s Investors Service noted that the Trump administration’s exclusion of oil and gas from the tariff scheme limits the immediate impact on MENA economies. 

This comes as US President Donald Trump imposed a 10 percent universal import tariff and duties of up to 145 percent on Chinese goods — prompting Beijing to retaliate with tariffs of up to 125 percent — while granting a 90-day pause on steeper tariffs for dozens of other countries. 

Moody’s views align with an April report by global consulting firm PwC, which stated that Middle Eastern economies will not face a direct impact from the tariffs, but will be affected through indirect channels. 

“Exemption of oil and gas from the new US tariff scheme limits the size of the region’s affected exports to a relatively small share of GDP (gross domestic product), except for Jordan,” Moody’s said. 

The report added that second-order consequences, such as declining demand, lower investor risk appetite, and cheaper oil, are more likely to weigh on credit conditions. 

“The second-round impact, due to weaker global demand, will be tempered by a relatively limited reliance of the MENA region’s growth on non-energy exports,” it added. 

The analysis further noted that the oil market has already priced in expectation of weaker global growth. Brent crude declined to around $65 per barrel in April — about 20 percent below the average price recorded in 2024. 

Moody’s cautioned that if significantly low oil prices persist, they could strain the fiscal and external balances of oil and gas-exporting countries in the GCC region. 

Prolonged low oil prices could also force Gulf Cooperation Council governments to slow the rollout of infrastructure projects tied to economic diversification efforts, dampening near-term growth prospects for the domestic non-hydrocarbon sector. 

“The sovereigns that are most exposed to lower oil prices are those with the largest government oil revenue as a share of GDP and the highest (fiscal break-even) oil price that balances their government budgets, especially Kuwait, Iraq, Saudi Arabia and Bahrain,” Moody’s said.

It added: “While the starting point for Saudi Arabia and Kuwait, which has virtually no government debt, will be a very strong government balance sheet, Bahrain’s debt already exceeds 130 percent of GDP and, unlike its higher-rated GCC neighbors, it has no significant government financial assets and very limited foreign-currency reserves to buffer the impact of lower oil prices.”  

The US-based agency added that issuers in the Middle East with weak credit quality, substantial financing needs, and limited buffers may face heightened liquidity pressures amid increased market volatility and tighter credit conditions. 

Amid ongoing uncertainties surrounding global growth prospects, the International Monetary Fund noted earlier this month that short-term growth in the Middle East will be driven by expansion in the non-oil sector, projecting regional economic growth of 2.6 percent in 2025 and 3.4 percent in 2026. 

Banking sector 

According to the latest study, growth prospects for the banking sector could come under pressure if economic activity slows and lending margins are compressed. 

Should the new US tariffs weigh on the global economy and drive down oil prices, regional business confidence may weaken and government spending could decline, ultimately dampening loan growth prospects for GCC banks. 

“Weaker growth could also erode asset quality as GCC banks have a large concentration in real estate and contracting. Both sectors are sensitive to investor confidence and government spending,” said Moody’s.

The report further noted that a potentially faster decline in global interest rates could squeeze banks’ margins. 

GCC banks’ loan books remain heavily weighted toward the corporate sector, where loans are typically floating-rate, which could exert pressure on bottom-line profitability. 

“Saudi Arabia is an exception with an evenly split book between corporate and retail. However, GCC banks in general and large banks in particular are well-positioned to withstand market volatility given their resilient financial profiles, diversified balance sheet, strong market access and healthy capital buffers,” said Moody’s.  

The analysis added that corporates will also feel the impact of weaker global demand, lower energy prices, and potentially reduced government spending. 

A significant global slowdown could further dampen demand for real estate in the GCC, particularly in the UAE, which has seen a sustained property market boom over the past four years. 

The agency concluded that sovereign wealth funds in the region may need to increase borrowing to preserve their capacity to finance and implement economic diversification mandates.

RIYADH: In the field of attracting global talent, Saudi Arabia stands out as a hub of innovation and opportunity, recruiting skilled professionals from all over the world to drive growth in key sectors including technology, finance, and manufacturing.

With a strong focus on talent development and labor market improvements, initiatives such as the Premium Residency program represent an important step in transforming the Kingdom’s workforce.

More than 2,600 healthcare workers became beneficiaries of this scheme, dubbed the Saudi Green Card, in October – a clear sign that the Kingdom is proactively working to secure international talent within the country’s borders

How Saudi Green Card is reshaping landscape for global talent attraction in Saudi Arabia

Launched in 2021, the Premium Residency program offers long-term residency to skilled workers, entrepreneurs, and investors to create a more competitive environment for top professionals.

It offers expats access to benefits available to Saudi nationals, including the ability to own property, start businesses, and make use of public services. 

Raymond Khoury, partner and public sector practice lead, at Arthur D. Little, Middle East, believes the program will positively impact key sectors by attracting the talent  needed to service the growing population — set to rise from 34.4 million today to 55 million by 2030.

“Such incentives allow skilled professionals to have a more stable personal life environment with their families and the facility to make long-term investments in their careers – a better work-life balance in general,” Khoury told Arab News.

The Arthur D. Little partner went on to note that attracting skilled professionals in sectors like healthcare, technology, tourism, and renewable energy will help diversify Saudi Arabia’s economy, reduce oil dependency, and boost gross domestic product through innovation and strategic partnerships in non-oil industries.

“The program also facilitates international professionals in academia and research, allowing for stronger collaborations between universities and private institutions in Saudi Arabia and their international counterparts,” he said.

Khoury added that while the initiative does face challenges, such as the time it takes for international talent to adapt to local cultural and legal norms, these can be mitigated by providing clear integration pathways and support for newcomers. 

The international talent infusion not only accelerates progress within key sectors but also drives cultural and intellectual exchange, fostering long-term growth and innovation.

Raymond Khoury, Partner and public sector practice lead at Arthur D. Little, Middle East

While Saudi Arabia has this program, its Gulf Cooperation Council neighbors, such as UAE and Qatar, have their own talent attraction schemes in place, meaning there is competition for skilled professionals, Khoury explained. Abhishek Sharma, partner at Oliver Wyman’s Government and Public Institutions practice for India, Middle East and Africa, said the Kingdom’s Premium Residency program is transforming the expatriate model by attracting highly skilled professionals.

“Given the Kingdom’s large-scale economic ambitions and the significant opportunities emerging across various sectors, these factors collectively position Saudi Arabia as an increasingly attractive destination for global talent,” Sharma told Arab News.

The Saudi Green Card is improving talent mobility especially in technology, by allowing professionals to work and live without a sponsor, he added. 

This supports Vision 2030’s goal of making Saudi Arabia an innovation hub, and boosts technological growth in sectors like artificial intelligence and digital transformation, according to Mamdouh Al-Doubayan, managing director of Middle East and North Africa at Globant.

“However, while attracting global talent is crucial, sustainable growth depends on balancing international expertise with local knowledge development. The real opportunity lies not just in recruitment but in fostering a dynamic, homegrown workforce capable of driving long-term digital adoption,” Al-Doubayan told Arab News.

International talent influx 

The influx of international talent is vital for advancing key sectors in Saudi Arabia, such as technology, healthcare, tourism, and renewable energy — all of which support Vision 2030’s goal of reducing oil dependence and fostering a sustainable, knowledge-based economy.

Khoury believes innovation and technology advancement across core and adjacent sectors is critical in creating innovation hubs and driving the digital transformation of industries.

“This also covers supporting technology research, development and innovation startups and an encompassing ecosystem that fosters knowledge transfer and international collaboration,” he said.

Healthcare was raised as an area where attracting skilled medical professionals — doctors, nurses, and researchers — can effectively and efficiently improve patient outcomes, introduce advanced medical practices, and lead groundbreaking research. 

By incentivizing industries that rely on highly skilled professionals, Saudi Arabia can accelerate sectoral growth and enhance its overall economic contribution.

Abhishek Sharma, Partner at Oliver Wyman’s Government and Public Institutions practice

“Establishing the Kingdom as an attractive medical tourist destination is part and parcel of some mega-projects — for example the Red Sea project — today under Vision 2030,” Khoury said.

The Arthur D. Little partner also highlighted that improving the education sector in Saudi Arabia is essential for building a knowledge-based economy, particularly in STEM fields.

Attracting international talent in tourism, hospitality management, event planning and arts development is key for Saudi Arabia, particularly for destinations such as Qiddiya and the Red Sea project, where the target is to attract and service between 60 million and 70 million visitors per year by 2030.

“Such a large target requires domain knowledge of global trends and international best practices, which international talent can bring in a timely manner,” Khoury said.

He also flagged the need for international expertise in green technologies as being crucial for Saudi Arabia’s Vision 2030, especially in renewable energy. Global partnerships and innovative solutions will aid in achieving net-zero emissions, optimizing energy efficiency, and creating sustainable business models.

“The international talent infusion therefore not only accelerates progress within key sectors but also drives cultural and intellectual exchange, fostering long-term growth and innovation for the Kingdom,” Khoury said.

Knowledge economy

From Oliver Wyman’s side, Sharma explained that human capital is a key driver of economic growth, with skilled professionals fostering expansion, which in turn attracts more talent. Saudi Arabia is set to experience this positive cycle over the next seven to 10 years.

“As the Kingdom advances toward its Vision 2030 goals, transitioning to a knowledge-based economy, improving the overall quality, skill level, and productivity of the workforce will be critical. By incentivizing industries that rely on highly skilled professionals — such as professional services, technology, and advanced manufacturing — Saudi Arabia can accelerate sectoral growth and enhance its overall economic contribution,” he said. 

While attracting global talent is crucial, sustainable growth depends on balancing international expertise with local knowledge development.

Mamdouh Al-Doubayan, Managing director of Middle East and North Africa at Globant

According to Al-Doubayan from Globant, international talent is crucial to the Kingdom’s shift toward a knowledge-based economy, bringing specialized skills and innovative approaches, particularly in technology. 

Collaborating with local professionals drives progress, supports Vision 2030’s goals of economic diversification, and enhances competitiveness in a digital, AI-driven world.

“By integrating global expertise with local capabilities, Saudi Arabia is not only strengthening its workforce but also creating an environment where homegrown talent can thrive. The impact goes beyond immediate job creation — it builds a long-term, self-sustaining innovation ecosystem that reduces reliance on traditional industries and positions the Kingdom as a leader in digital transformation,” he said.

Future strategies 

As Saudi Arabia aims to become a global hub for business, technology, and culture through Vision 2030, the ongoing influx of international talent will play a crucial role in driving economic growth and fostering innovation.

Arthur D. Little’s Khoury believes that enhancing immigration policies, including expanding programs like the Saudi Green Card, could see tailored benefits being offered to professionals in sectors such as renewable energy, AI, and biotech, as well as healthcare and fintech, providing long-term opportunities.

He explained that availing and advancing innovation hubs and ecosystems in support of attracting and retaining tech entrepreneurs, researchers, and innovators, is vital, as is offering them not only business opportunities but also a platform to collaborate with global experts in their fields. 

“This is a key focus of the Saudi Research Development and Innovation Authority in its aim to bolster RDI capabilities and create a compelling environment for leading scientists, engineers, and researchers,” Khoury said.

He added that the government is boosting investments in incubators, accelerators, and venture capital to support local and international startups, aiming to create a diverse innovation ecosystem and foster new tech-driven industries.

Additionally, the partner explained how the Kingdom’s investment in education and upskilling initiatives to build a knowledge-based economy, focusing on attracting international students and researchers while pairing global talent with local professionals, will enhance expertise.

“Having a skilled and diverse workforce will better enable Saudi Arabia to effectively compete on the international stage and attract more high-value investments that will spur further economic development and prosperity,” Khoury said.

Oliver Wyman’s Sharma highlighted attracting top talent is key to the Kingdom’s goal of becoming a global leader in AI.

He said that a parallel strategy of aggressively upskilling the local workforce will be “equally critical” in sustaining long-term economic and innovation-driven growth.

Al-Doubayan from Globant explained with growing demand for skilled professionals in technology, entertainment, and sustainability, organizations must offer not just jobs but upskilling, career development, and innovation-driven environments to position the Kingdom as a long-term career destination.

He said: “The increasing integration of AI across industries is intensifying competition for top talent. Organizations now face a paradigm shift: moving from simply retaining talent to empowering professionals to grow, innovate, and remain engaged within the Kingdom’s evolving workforce. The key challenge is no longer just recruitment — it is creating an environment where individuals choose to stay despite global demand for elite professionals.”