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December 2021

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ECONOMIC TRENDS

 

The kingdom’s 2022 budget signals a return to form, with authorities estimating a surplus equivalent to 2.5% of its GDP.


GCC EQUITY

 

Massive demand for shares has prompted company executive to dub the newly listed company as a ‘capital of ambitions’.

PETROCHEMICALS

 

Soaring prices, rising consumption, and hefty infrastructure spending are giving the sector a bright prospect.

RENEWABLE ENERGY

 

New power generation and water desalination initiatives reflect the kingdom’s net zero targets and renewable energy push.


SME

 

The future of work is changing in the kingdom, as more national women join the workforce and become important contributors to economic development.


MANUFACTURING

 

he development, which is part of the NEOM smart city project, will offer modern and sustainable infrastructure for the manufacturing sector.

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 IN THIS EDITION

The Saudi economy welcomed 2021 still weathering the impact of COVID-19, but has gathered strength as the year ends.

While the virus and its many variants continue to cast a dark cloud over the global and regional economic outlook, Saudi has shown signs of resilience.

The number of reforms, economic programmes and initiatives rolled out in 2021 should help the kingdom attain a momentum, which could insulate it from many
external factors, and unlock new pockets of growth.

With COVID-19 vaccination rates at 65.5%, and the economy lifted by resurgent commodity markets, country enters 2022 from a position of strength.

The promising outlook is reflected in the country’s 2022 budget, which projects a 7.4% growth forecast and a surplus of SAR 90 billion, or 2.5% of GDP

Equally crucial, Saudi is emerging as a major investment hub, with many international corporations eager to either set up operations or acquire assets in the country.

In December, a consortium led by BlackRock Real Assets and Hassan Investment Company signed a USD 15.5 billion lease for Aramco’s gas pipeline network. The
deal unlocks additional value from Saudi Arabia’s diverse asset base and has attracted interest from a wide range of investors, highlighting the compelling investment opportunity.

According to Invest Saudi, the kingdom saw foreign investment flow of SAR 51.8 billion by the second quarter of 2021, compared to SAR 20 billion in all of 2020. Total licences issued surged 263.9% in the second quarter of 2021, compared to the same period last year.  

In October, the government also launched the National Investment Strategy (NIS), with a target to increase net foreign direct investment flows to SAR 388 billion annually by 2030.

A key element of the new investment flow is its focus on promising sectors. Invest Saudi data shows retail and ecommerce, manufacturing, ICT, and professional and scientific services led the new foreign investment projects in the kingdom in the second quarter of 2021 – a trend that appears to have continued for the rest of the year.

The growth of these sectors hold the key to Saudi’s diversified economic future – and it’s off to an excellent start.
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