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December 2023

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ECONOMY



 

The new budget reflects Saudi authorities’ commitment to build a resilient and strong economic recovery through fiscal reforms and strategic spending.


TRADE



 

Two of the world’s economic powerhouses are embarking on an alliance that will tap into investment opportunities in various sectors.

RENEWABLE ENERGY



 

As the world commits to carbon neutrality, one of the Middle East’s largest suppliers of electricity unveiled a blueprint for energy efficiency and green innovation.

SUKUK MARKET



The pandemic, oil price fluctuations, slow global recovery, and interest rate hikes have failed to dampen Shariah-compliant bond instruments’ investment appeal.

 

 

SME STARTUPS


 

The kingdom represents nearly half of venture capital activities in the Middle East and North Africa region, attracting billions of dollars of SME financing.

 

 

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 IN THIS EDITION

Saudi Arabia attracted foreign direct investment (FDI) of around SAR 14.3 billion in the first half of 2023, with the number of investment licenses granted by the Ministry of Investment jumping by 60.4% to reach 3,456 during the period.

The National Investment Strategy (NIS), part of Saudi Vision 2030, seeks to create diversified and strong investment opportunities, boost net FDI flows, improve the country’s investment environment, and lure foreign investors, with the ultimate goal of increasing investment as a share of GDP from 22% in 2019 to 30% in 2030.

The Public Investment Fund (PIF) is also expected to inject an average of SAR 150 billion annually into the domestic economy until fiscal year (FY) 2025, which will create pathways for foreign companies to invest in the kingdom, according to the Budget 2024 Statement released by the Ministry of Finance.

PIF subsidiaries are expected to contribute SAR 1.2 trillion to the non-oil GDP accumulatively until 2025. The fund has also set the following goals: to inject domestic investments into new projects, focus on 13 vital and strategic sectors, and contribute to raising the level of local content to 60% in PIF and its subsidiaries. Thus, revenue sources are diversified, and the quality of life is improved. By the end of FY 2025, PIF aims to have assets exceeding SAR 4 trillion and to create 1.8 million direct and indirect jobs.

Meanwhile, the 2024 budget also expects government capital expenditure (CAPEX) to reach around SAR 189 billion in the new fiscal year, making up 15.1% of the total expenditure.

“It is worth noting that the Government is determined to further diversify sources of economic growth by directing expenditure to regional and sectoral strategies,” according to the 2024 Budget Statement.

“In addition, it aims to accelerate the implementation of mega projects and vision programmes in order to achieve the development objectives of Saudi Vision 2030. The Government also continues to enable and maximise the role of the private sector and stimulate the investment environment.”
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