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Saudi Arabia, Italy to deepen partnership in multiple fields, including aerospace, security

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Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef and Lombardy Regional Government President Attilio Fontana met to explore greater industrial cooperation. SPA
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Updated 16 October 2024
MOHAMMED AL-KINANI
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Saudi Arabia, Italy to deepen partnership in multiple fields, including aerospace, security

  • Visit to Leonardo highlights Kingdom’s dedication to enhancing its aviation industry and harnessing global expertise
  • Saudi minister of industry and mineral resources also took part in the ComoLake 2024 Conference
Updated 16 October 2024
MOHAMMED AL-KINANI

JEDDAH: Saudi-Italian ties in aerospace, defense, and security are set to strengthen as officials from both nations discuss expanding their long-standing partnership in these sectors.

During a meeting held on Oct. 16 in Milan, Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef and Stefano Pontecorvo, chairman of Leonardo, an Italian multinational company specializing in aerospace, defense, and security, discussed localizing the manufacturing of helicopter components in Saudi Arabia, including aircraft structures, propellers, fins, and electronic flight systems.

Leonardo has maintained a significant presence in the Kingdom for over 50 years, offering various platforms, systems, and services. 

The partnership aligns with Saudi Vision 2030, which seeks to cultivate a strong and diversified economy, with its aviation sector expected to contribute SR11.4 billion ($3.04 billion) to the country’s gross domestic product by 2030.

 

 

Alkhorayef’s visit to Leonardo highlights Saudi Arabia’s dedication to enhancing its aviation industry and harnessing global expertise to achieve its economic objectives, according to the Saudi Press Agency.

By localizing helicopter component manufacturing, the Kingdom aims to create jobs, transfer technology, and develop a domestic supply chain for the aviation industry. 

The initiative is part of a broader effort to strengthen the nation’s capabilities in maintenance, repair, and overhaul services and in producing spare parts for engines, drones, and navigation systems.

Alkhorayef, who commenced a three-day visit to Italy on Oct.14, also met Attilio Fontana, president of the Lombardy region of Italy, to explore the possibility of greater industrial cooperation with a focus on the pharmaceuticals, vaccines, and electric vehicles industries.

The two officials underscored the importance of reinforcing ties, particularly in the industrial and mining sectors, by capitalizing on the robust Saudi-Italian relationship and the engagement of the private sector.

Alkhorayef emphasized the diversification objectives of Vision 2030 and outlined investment opportunities in key sectors, highlighting the competitive advantages available to foreign investors, such as advanced infrastructure and supportive government initiatives.

 

 

The Saudi minister also took part in the ComoLake 2024 Conference, which is being held from Oct. 15 to 18 at the International Exhibition and Congress Center of Villa Erba in Cernobbio, on Lake Como.

In a post on his X account following his involvement in the event, Alkhorayef said: “During my participation in the ComoLake Conference in Italy, I emphasized the significant progress the Kingdom has made in its transformational journey within the industrial and mining sectors.”

He added: “This progress, particularly in digital transformation and advanced manufacturing technologies, has opened new horizons for growth and development across various sectors.”

In his speech, the minister said that Saudi Arabia is committed to enhancing global cooperation in the sector and building effective and close partnerships with international industrial organizations to achieve a more balanced and sustainable future.

“The future and advancement of industry worldwide require fruitful international cooperation. Therefore, the Kingdom is keen on partnering with relevant international entities to share knowledge, technology, and expertise to drive innovation, create job opportunities, and build a more sustainable future for all,” he said.

He explained that the country is undergoing an economic transformation journey, with its ambitious plan for 2030, which serves as a roadmap for diversifying sources of national income.

He said that the topics of the ComoLake 2024 align with several objectives of this vision, particularly those related to innovation, sustainability, and global collaboration.

The minister also said that the Kingdom’s National Industrial Strategy includes targets for adopting applications and technologies of the Fourth Industrial Revolution, focusing on integrating artificial intelligence, automation, and data analytics to enhance efficiency, productivity, and sustainability in the industrial sector.

The strategy, he added, also aims to adopt smart manufacturing technologies to develop the Saudi industry and establish new standards for sustainable industrial practices, reported SPA.

He pointed out that artificial intelligence plays a crucial role in automating industrial facilities in Saudi Arabia, transforming them into smart ones.

The minister said that the mining sector is another key pillar of the Kingdom’s economic transformation, adding that Vision 2030 aims for this sector to serve as a source for diversifying the economy’s income, given that the country possesses abundant reserves of critical minerals, such as gold, phosphate, and rare earth elements, which are vital for the energy transition.

Alkhorayef underscored that the country is keen on achieving sustainability in the industrial sector by relying on clean energy solutions and integrating renewable energy sources into industrial operations to meet the Kingdom’s goal of reaching net-zero emissions by 2060.

He added that Saudi Arabia seeks to contribute to the global transition toward green industries and establish a more sustainable model for industrial growth.

He concluded by inviting participants at the event to attend the International Mining Conference 2025, which will be held in Riyadh in January. The gathering represents an important opportunity for establishing effective partnerships in the mining sector, exploring the quality opportunities it offers, and discussing the latest innovative technologies in operations, with a focus on sustainability solutions.

This year’s edition of the ComoLake gathering featured 150 speakers from 14 countries, including representatives from governments and industrial institutions worldwide. It is designed to foster discussions on current and future digital policies, serving as a platform for institutions, businesses, and universities to engage with and explore the new paradigms of economic growth in Italy and the Euro-Mediterranean region within a multipolar global context.

Alkhorayef also met with Italian Minister of Enterprises and Made in Italy Adolfo Urso. They discussed ways to enhance industrial cooperation between the two countries and boost bilateral investment particularly in the mining sector, SPA reported.

The ministers also explored strategies to boost Saudi exports to Italy, leveraging the services provided by the Saudi EXIM Bank to support this effort.

Topics: Saudi Arabia Italy main Saudi-Italian ties aerospace Defense Bandar Alkhorayef Leonardo

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Qatar records $137m budget deficit in Q1, ending 3-year surplus streak

Updated 13 sec ago
Dayan Abou Tine
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Qatar records $137m budget deficit in Q1, ending 3-year surplus streak

Updated 13 sec ago
Dayan Abou Tine

RIYADH: Qatar posted its first budget deficit in more than three years — a 500 million Qatari riyal ($137 million) shortfall in the first quarter of 2025, the Ministry of Finance reported. 

Ministry figures show the same period last year registered a 2.06-billion-riyal surplus. 

This comes as Doha undertakes a cautious fiscal recalibration mid-way through its Third National Development Strategy, relying on conservative oil-price assumptions, program-based budgeting, and a long-anticipated value-added tax rollout to diversify revenue. 

In a series of posts on X, the ministry stated: “The State Budget recorded a deficit of QR 0.5 bn in Q1 2025, and the deficit was financed through debt instruments.”  

It added: “The value of contracts with foreign companies reached QR 1.5 billion in the first quarter of 2025, representing a 50 percent increase compared to the same quarter last year.” 

The budget figures showed that revenue fell 7.5 percent year on year to 49.4 billion riyals, with hydrocarbons supplying 42.5 billion riyals while non-oil receipts held at 6.9 billion riyals. 

Spending slipped 2.8 percent to 49.9 billion riyals, comprising 6.9 billion riyals for salaries and wages, 18.5 billion riyals in other current costs, and a combined 14.3 billion riyals for major and minor capital projects. 

Despite the tighter envelope, procurement remained brisk: state entities awarded about 6.4 billion riyals in tenders and auctions, including 1.5 billion riyals to overseas contractors — up 50 percent on the same period last year. 

The ministry’s Sector Business Index showed the busiest spending concentrations in municipality and environment, health, energy and the General Secretariat of the Council of Ministers. 

The International Monetary Fund’s February 2025 assessment said Qatar’s economy was moving past the post-World Cup slowdown. 

Real gross domestic product is expected to grow about two percent in 2024-25, then average roughly four-and-three-quarters percent once the planned expansion of liquefied natural gas output and the early reforms of the Third National Development Strategy take effect. 

Inflation should fall to 1 percent this year and settle near 2 percent over the medium term, it added. 

Lower hydrocarbon prices cut the 2023 current-account and budget surpluses to 17 percent and five-and-a-half percent of national output, with a further easing underway; however, both balances should remain positive as gas export volumes rise. 

Banks remain sound, holding capital equal to about one-fifth of risk-weighted assets, while problem loans stay below four percent and are well provisioned.  

The IMF urged Doha to introduce a value-added tax, adopt a medium-term budget anchor, sharpen the efficiency of public spending, deepen financial-sector oversight, and accelerate private sector-led diversification to secure long-run resilience. 

Topics: Qatar budget

Saudi Aramco secures $5bn in bond sale to bolster financial flexibility

Updated 45 min 26 sec ago
Nour El-Shaeri
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Saudi Aramco secures $5bn in bond sale to bolster financial flexibility

Updated 45 min 26 sec ago
Nour El-Shaeri

RIYADH: Saudi Aramco has raised $5 billion through a three-tranche bond issuance under its Global Medium-Term Note Program, the company said.   

The senior notes, which were priced on May 27 and listed on the London Stock Exchange, include $1.5 billion maturing in 2030 at a 4.75 percent coupon, $1.25 billion maturing in 2035 at 5.375 percent, and $2.25 billion maturing in 2055 with a 6.375 percent coupon.  

This follows Aramco’s $6 billion bond sale in July 2024 and comes amid heightened Gulf debt market activity, including Saudi Arabia’s Public Investment Fund, which has raised $5.25 billion so far in 2025 through multiple issuances — including a $4 billion bond in January — and Abu Dhabi’s Masdar, which recently issued a $1 billion green bond. 

Ziad Al-Murshed, executive vice president of finance and chief financial officer at Aramco, said: “The strong demand for our new bond offering, as reflected in the diversified orderbook, is a testament to global investors’ confidence in Aramco’s financial resilience and robust balance sheet.”   

He added: “Pricing the offering with no new issuance premium across all tranches clearly reflects Aramco’s unique long-term credit proposition.”   

The bond offering saw tightened spreads across all maturities, indicating strong investor interest.  

The five-year notes were priced at 80 basis points over US Treasuries, while the 10- and 30-year tranches were set at 95 and 155 basis points respectively — each tighter than initial price guidance earlier in the day.  

Proceeds from the latest issue will be used for general corporate purposes, as the state oil giant continues to support Saudi Arabia’s Vision 2030 diversification strategy.   

The issuance comes as Aramco navigates a more challenging environment marked by declining profits and lower crude prices.   

The company reported a 4.6 percent drop in first quarter earnings, citing weaker sales and rising operating costs. In March, it announced plans to cut its dividend by nearly a third due to declining free cash flow. 

Amid these headwinds, Aramco is also exploring asset sales and capital market strategies to maintain liquidity and finance its global expansion ambitions.   

In May, the company published a new prospectus for a sukuk issuance program, signaling potential future activity in debt markets.   

The sukuk, also to be listed on the London Stock Exchange, may be issued over the next 12 months. 

Meanwhile, Masdar — Abu Dhabi’s renewable energy company — also returned to the debt market in May with a $1 billion green bond issuance.   

The deal was split into two equal tranches of $500 million each, with maturities of five and ten years and coupon rates of 4.875 percent and 5.375 percent, respectively.   

The bond was significantly oversubscribed, receiving $6.6 billion in peak orders, which highlights the growing global appetite for sustainable investment instruments.  

Topics: Aramco bonds Sukuk

Saudi Arabia’s economic growth to outstrip US, UK, France in 2026: OECD

Updated 03 June 2025
Nirmal Narayanan
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Saudi Arabia’s economic growth to outstrip US, UK, France in 2026: OECD

Updated 03 June 2025
Nirmal Narayanan

RIYADH: Saudi Arabia’s real gross domestic product is projected to grow by 2.5 percent in 2026, a rate that surpasses forecasts for the US, Germany, the UK, and France, according to an analysis.

In its latest report, the Organization for Economic Cooperation and Development said that the Kingdom’s economy is projected to grow by 1.8 percent this year, also higher than several of its G20 peers. 

In April, the International Monetary Fund projected that the Kingdom’s economy would witness a growth of 3 percent in 2025 and would further accelerate to 3.7 percent the following year. 

In its latest report, the OECD also downgraded its global economic growth prospects from 3 percent to 2.9 percent for both 2025 and 2026. 

“The global outlook is becoming increasingly challenging. Substantial increases in trade barriers, tighter financial conditions, weakened business and consumer confidence, and elevated policy uncertainty all pose significant risks to growth,” said the OECD. 

It added: “Global GDP growth is projected to slow from 3.3 percent in 2024 to 2.9 percent this year and next year based on the assumption that tariff rates as of mid-May are sustained.” 

Collectively, G20 nations are expected to witness an economic growth of 2.9 percent in both 2025 and 2026, with India bucking the trend amid economic volatility. 

According to the report, India’s GDP is expected to expand by 6.3 percent in 2025 and 6.4 percent in 2026. 

The OECD added that China’s economy will grow by 4.7 percent and 4.3 percent in 2025 and 2026, respectively, while the US is expected to witness an economic growth of 1.6 percent in 2025 and 1.5 percent in 2026. 

The French economy is forecast to expand by 0.6 percent in 2025 before slightly accelerating to 0.9 percent in 2026, and the OECD projects the UK’s economy will advance by 1.3 percent in 2025, while it will decelerate to 1 percent growth next year. 

According to the report, Germany’s GDP is set to grow by 1.2 percent during 2026.

The OECD further stated that Saudi Arabia is expected to maintain a healthy inflation rate of 1.9 percent in 2025 and 1.8 percent in 2026, respectively. 

In April, the IMF also predicted that inflation in the Kingdom would remain contained, with the average annual rate holding steady at 2.1 percent in 2025 and easing slightly to 2 percent the following year. 

Collectively, among G20 nations, inflation is expected to average 3.6 percent in 2025 and 3.2 percent in 2026, according to OECD. 

“Rising trade costs — particularly in countries implementing new tariffs — are likely to fuel inflation, although this may be partly offset by softer commodity prices. Risks to the outlook remain substantial,” said OECD. 

It added: “Inflation may also stay elevated for longer than anticipated, especially if inflation expectations continue to rise. On the upside, an early reversal of recent trade barriers could boost economic growth and help ease inflationary pressures.” 

The OECD emphasized that governments should work together to resolve their concerns about the global trading system rather than escalating tensions through more retaliatory trade barriers.

The analysis urged governments to implement reforms that would reduce trade fragmentation, along with strengthening the supply chain by diversifying both suppliers and buyers. 

The OECD also highlighted the importance of implementing effective monetary policies, noting that central banks should remain vigilant to prevent disinflation in times of heightened uncertainty and increased trade costs. 

“Provided trade tensions do not intensify further and inflation expectations remain anchored, policy rate reductions can continue in economies where inflation is projected to moderate,” added the report. 

The study also emphasized the need to increase investments to ensure resilient growth among nations, suggesting that governments should implement structural policy reforms to revitalize the business environment.

According to the OECD, governments should foster business dynamism by promoting competition, reducing entry barriers, and supporting entrepreneurship. 

“Reducing policy uncertainty is particularly important, as it would lower the risk premia businesses build into their hurdle rates, thereby encouraging capital spending,” added the OECD.

Topics: Organisation for Economic Co-operation and Development (OECD) Saudi economy

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Saudi banks’ new-home lending jumps 24% to $9bn despite higher rates 

Updated 03 June 2025
Dayan Abou Tine
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Saudi banks’ new-home lending jumps 24% to $9bn despite higher rates 

Updated 03 June 2025
Dayan Abou Tine

RIYADH: Saudi banks extended SR34.1 billion ($9.1 billion) worth of fresh residential mortgages to individuals in the first four months of 2025, up 24.14 percent from the same period last year. 

Latest data from the Saudi Central Bank, also known as SAMA, shows that January led the surge with SR10.5 billion in new loans, followed by February at SR8.9 billion, March at SR8.4 billion and April at SR6.3 billion. 

The brisk start to the year pushed total outstanding retail real-estate lending to a record SR698.8 billion at the end of the first quarter, surpassing the SR223.4 billion on corporate property books and underscoring the dominance of households in the market. 

The momentum is tied to a range of Vision 2030 housing initiatives aimed at lifting Saudi home ownership to 70 percent by the end of the decade. 

Flagship programs such as Sakani, low-cost mortgage guarantees and the Saudi Real Estate Refinance Co.’s liquidity windows continue to funnel buyers into the market. 

Digital procurement partnerships are also speeding up delivery times. In February, Riyadh-based Penny Software teamed up with the National Housing Co. to automate sourcing for thousands of new units, a move expected to shave costs across the supply chain. 

The platform will function as a centralized procurement hub, directly connecting NHC contractors with vetted suppliers to streamline purchasing and enhance supply-chain oversight, tackling the bottlenecks that traditional procurement creates in housing projects. 

The acceleration has come in the face of the highest interest rate environment in nearly two decades. 

Knight Frank’s February household survey showed demand is cooling. Only 29 percent of Saudi tenants now plan to buy a home in 2025, down from 40 percent a year earlier, with “house prices being too high” ranking among the top three deterrents after already owning a property and having no reason to move. 

The consultancy pins the softer appetite on “a high-interest-rate environment and rampant price growth, particularly in Riyadh,” which is nudging younger Saudis toward renting instead of owning. 

Official figures confirm that tight supply is still feeding through to valuations. The General Authority for Statistics said Saudi real estate prices rose 4.3 percent year on year in the first quarter, with residential values up 5.1 percent.

Villa prices jumped 10.3 percent nationwide, while residential land — which carries the heaviest weight in the index — gained 5.3 percent.  

Knight Frank’s survey also showed private buyers still eyeing flagship giga-projects such as NEOM and the Red Sea, although interest in the former has moderated as alternative master-planned communities come on stream. 

With oil receipts fueling fiscal space, policymakers are expected to keep subsidising mortgages and unlocking land banks, even as central-bank rates remain high through mid-2025. 

Topics: Mortgages saudi mortgages Saudi banks

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Kuwait non-oil sector maintains solid expansion while Egypt edges closer to recovery: S&P 

Updated 03 June 2025
Nour El-Shaeri
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Kuwait non-oil sector maintains solid expansion while Egypt edges closer to recovery: S&P 

Updated 03 June 2025
Nour El-Shaeri

RIYADH: Business conditions in Kuwait’s non-oil private sector continued to expand in May, while Egypt experienced a slower pace of contraction, offering tentative signs of stabilization. 

According to the latest Purchasing Managers’ Index surveys released by S&P Global, Kuwait’s PMI stood at 53.9, down slightly from 54.2 in April but remaining comfortably above the 50 no change mark. 

Meanwhile, Egypt’s PMI rose from 48.5 in April to 49.5 in May, its highest level in three months, but still below the neutral 50.0 threshold that separates growth from contraction. 

In Kuwait, non-oil firms reported strong growth in both output and new orders, extending a streak of expansion to 28 consecutive months. 

Respondents attributed the uptick to competitive pricing strategies and enhanced marketing efforts. 

Kuwait’s expansion aligns with broader economic projections by the International Monetary Fund and the World Bank, with real gross domestic product growth forecasts of 1.9 percent and 3.3 percent, respectively, in 2025. 

These projections reflect a recovery from two consecutive years of contraction, supported by rising oil production as OPEC+ cuts ease, and expanding non-oil activity led by infrastructure development and credit growth. 

“The strong growth seen in April was largely maintained in May, with companies in Kuwait again reporting sharp increases in output and new orders,” said Andrew Harker, economics director at S&P Global Market Intelligence. 

“This sustained expansion is putting pressure on firms to build capacity, and extra staff were hired accordingly in May,” he added. 

Employment rose for the third consecutive month, and the rate of job creation was the joint-fastest recorded since the PMI series began in 2018. 

However, staffing growth remained modest overall and did not fully alleviate rising backlogs of work. 

“The pace of job creation was still only modest, however, and backlogs of work continued to rise, so we may see even greater employment growth in the months ahead,” Harker added. 

Purchasing activity also increased for the second month running, and firms reported a solid build-up in input inventories. Supplier performance improved, with delivery times shortening for the third consecutive month. 

Cost pressures intensified midway through the second quarter, driven by rising prices for advertising, transport, staffing, food, and stationery. 

Input price inflation accelerated to its highest level since March 2024, prompting firms to raise output prices at the sharpest rate in nearly a year. 

Despite these challenges, business confidence reached a 12-month high in May, with 36 percent of respondents expecting output to grow over the next year. 

Optimism was supported by stronger demand, competitive pricing, and ongoing marketing activity. 

Egypt en route to stabilization 

In Egypt, although the non-oil private sector remained under pressure, the pace of deterioration in business conditions slowed. 

The headline PMI of 49.5, up from 48.5 in April, indicated the mildest contraction since February. 

The improvement came amid softer declines in both output and new business, aided by a rebound in the manufacturing sector. 

Egypt’s softer PMI contraction in May aligns with the IMF’s upward revision of the country’s growth forecast to 3.8 percent for 2025, signaling emerging signs of resilience in the non-oil economy. 

“Output and new orders fell at the slowest rates for three months,” said David Owen, senior economist at S&P Global Market Intelligence. 

“Nevertheless, a number of surveyed firms continued to report softness in market demand, leading them to cut back on purchases and staffing,” he added. 

Companies in Egypt reduced purchasing activity at the fastest rate since October, citing efforts to streamline inventories in response to subdued demand. 

Stock levels of inputs rose only marginally. Employment fell for the fourth consecutive month, though the decline remained mild, driven primarily by a policy of not replacing staff who voluntarily left their positions. 

Egyptian businesses faced the steepest rate of input cost inflation so far in 2025, with price increases reported for fuel, cement, and paper. 

Volatile exchange rates, particularly the weakening of the Egyptian pound against the US dollar, further contributed to supplier price hikes. 

Wage inflation, by contrast, remained modest. After flatlining in April, output prices rose at the fastest pace in seven months as firms passed on part of their rising costs to customers. 

Sentiment in Egypt improved slightly from April, though optimism remained below historical norms. 

“Although many of the key PMI metrics continued to indicate a deterioration in business conditions in May, the overall pace of decline was not as sharp as in April and softer than the survey’s historical trend,” Owen added. 

Persistent cost pressures and weak domestic demand continued to weigh on expectations for future activity. 

Some businesses voiced concern over external headwinds, including global trade uncertainty and the impact of US tariffs. 

Topics: kuwait economy Egypt economy S&P Global 

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