Saudi Arabia’s economy set for 5.3% growth in 2025, driven by reforms: S&P Global

The US-based credit rating agency noted that anticipated rate cuts by the US Federal Reserve will likely benefit emerging markets like Saudi Arabia, which has strong growth fundamentals and increased capital inflows. File
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Updated 26 September 2024
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Saudi Arabia’s economy set for 5.3% growth in 2025, driven by reforms: S&P Global

RIYADH: Saudi Arabia’s gross domestic product is projected to grow by 1.4 percent in 2024, with an acceleration to 5.3 percent in 2025, according to S&P Global’s latest analysis of emerging markets.

The US-based credit rating agency noted that anticipated rate cuts by the US Federal Reserve will likely benefit emerging markets like Saudi Arabia, which has strong growth fundamentals and increased capital inflows.

Earlier this month, S&P Global emphasized that Saudi Arabia’s economic growth will be supported by its diversification strategy aimed at strengthening the non-oil private sector and reducing dependence on crude revenues.

“Saudi Arabia’s economic transformation is underway. The country is going through an unprecedented period of social, economic, and political reforms, designed to diversify its economy away from hydrocarbons,” the report stated. It further added, “In the next couple of years, these reforms will continue to raise domestic demand indicators, particularly those related to household spending, tourism, and construction.”

The agency forecasts economic growth of 4 percent in 2026, followed by a slight decline to 3.6 percent in 2027. Additionally, S&P Global anticipates an inflation rate averaging 1.8 percent in 2024 and 1.6 percent in 2025. The unemployment rate is projected to reach 4.7 percent this year and 4.4 percent next year.

Emerging markets outlook

S&P Global also predicts strong growth for India, with GDP expansions of 6.8 percent in 2024 and 6.9 percent in 2025. The agency noted that lower oil prices will benefit most emerging markets globally by improving external accounts and lowering inflation.

“While oil revenue provides fiscal benefits for some EMs through state-owned oil companies, most major EMs are net energy importers. Sustained lower oil prices could further accelerate monetary policy normalization across EMs. However, the potential escalation of the conflict in the Middle East could drive oil prices back up in the coming months,” S&P Global warned.

Southeast Asian economies are well-positioned among emerging markets to attract capital inflows, with Malaysia and Vietnam benefiting from electronics exports and foreign direct investment. The report indicated that industrial production in this region is outperforming that of other global areas.

“In Vietnam, manufacturing output grew about 10 percent year over year in the first half of 2024. The sector can be cyclical, however, and momentum may swing if global demand weakens,” it stated.

In Turkiye, the economy is expected to grow by 3.1 percent in 2024 and 2.3 percent in 2025, hindered by high interest rates limiting fixed investment.

S&P Global noted that real GDP growth forecasts for emerging markets, excluding China, remain at 3.9 percent in 2024 and 4.3 percent in 2025.

Potential risks for emerging markets growth

The report highlighted several risks facing emerging markets, including uncertainty surrounding the upcoming US election and its potential effects on trade and fiscal policy.

“More protectionist trade policies could lower trade volumes, raise inflation, and consequently put upward pressure on interest rates, thereby discouraging capital flows to emerging markets,” S&P Global cautioned. It also noted that expansive US fiscal policy could increase inflation and long-term Treasury yields, tightening financial conditions for emerging markets.

The report expressed concern over the high degree of uncertainty regarding the Chinese economy, which poses downside risks for growth in Asia. Escalation of the conflict in the Middle East could lead to increased energy and shipping costs, adversely affecting activity in that region.

OECD’s economic growth projections for Saudi Arabia

In a separate report, the Organization for Economic Cooperation and Development forecasted Saudi Arabia’s economic growth at 1 percent in 2024 and 3.7 percent in 2025. The OECD projected that the global economy will expand by 3.2 percent in both years, a slight increase from 3.1 percent in 2023.

“The global economy is starting to turn the corner, with declining inflation and robust trade growth. At 3.2 percent, we expect global growth to remain resilient both in 2024 and 2025,” stated OECD Secretary-General Mathias Cormann.

The report also predicted that headline inflation in G20 economies will ease to 5.4 percent in 2024 and 3.3 percent in 2025, down from 6.1 percent in 2023. Core inflation in G20 advanced economies is expected to decrease to 2.7 percent in 2024 and 2.1 percent in 2025.

“Declining inflation provides room for an easing of interest rates, though monetary policy should remain prudent until inflation has returned to central bank targets,” Cormann advised. He stressed the need for decisive policy actions to improve spending efficiency and optimize tax revenues.

The OECD indicated that ongoing geopolitical tensions could dampen economic growth by reducing investments and raising import prices. It called for decisive fiscal actions to ensure debt sustainability and create resources for future spending pressures.

“Stronger efforts to contain spending and enhance revenues, set within credible medium-term adjustment paths, are key to ensuring that debt burdens stabilize. Reinvigorating product market reforms that promote open markets with healthy competitive dynamics is essential for fostering stronger, sustained economic growth and alleviating long-term fiscal pressures,” the OECD concluded.


Oman’s sovereign fund nets $4.1bn profit with disciplined, future-focused strategy: Report

Updated 34 min 12 sec ago
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Oman’s sovereign fund nets $4.1bn profit with disciplined, future-focused strategy: Report

  • OIA ranked 35th globally by assets under management among sovereign wealth funds
  • Around 61.3% of its portfolio is invested locally

RIYADH: Oman’s sovereign wealth fund posted a record profit of 1.59 billion Omani rials ($4.1 billion) in 2024 and grew its assets above 20 billion rials, Global SWF reported.

The additional revenue enabled the Oman Investment Authority to transfer 800 million rials into the national budget, according to the report, providing a vital fiscal cushion and underscoring the fund’s expanding dual role as both an economic engine and a diplomatic asset.

Beyond headline profits, OIA is executing a strategic shift, prioritizing domestic investments to generate local value while forming global partnerships to secure future-ready capabilities in areas such as artificial intelligence, clean energy, logistics, and manufacturing.

Ranked 35th globally by assets under management among sovereign wealth funds, the OIA is increasingly being viewed as a nimble but ambitious player.

According to Global SWF, its disciplined portfolio strategy, increased transparency, and joint fund architecture are transforming the fund into a networked sovereign investor with a growing international footprint.

At home, OIA’s economic impact is significant. Around 61.3 percent of its portfolio is invested locally, mainly through its National Development Fund, which exceeded its 2024 target by deploying 2.1 billion riyals in strategic projects, according to Global SWF.

These include infrastructure ventures such as the Duqm Refinery, new mining operations in Lasil and Al Baydha, and solar energy plants in Manah.

Over the past year, the fund has inked a $300 million joint investment platform with Algeria and expanded its Vietnam-Oman Investment Fund. 

These investments signal a shift in Gulf sovereign wealth funds— from passive holdings to active, technology-driven deal-making aligned with national objectives.

In parallel, OIA has launched the Future Fund Oman with an allocation of $5.2 billion, targeting large-scale domestic projects, small and medium-sized enterprises, and startups, according to a separate May report by Global SWF.

In its first year, the fund approved over $2 billion in deals, with 75 percent of capital coming from foreign investors, underlining investor confidence in Oman’s diversification agenda.

Investing for Vision 2040

OIA’s 2024 performance also reflected its focus on human capital and job creation, with nearly 1,400 new roles generated and the Omanization rate across OIA-linked entities reaching 77.7 percent.

Through programs like Jadarah, Nomou, and Eidaad, the fund is aligning education, training, and employment with Vision 2040’s long-term growth objectives.

Meanwhile, the fund is moving from asset accumulation toward strategic exits. Since 2022, it has divested 19 assets, including three major IPOs: Abraj Energy Services, OQ Gas Networks, and Pearl REIF— raising over $2.5 billion, according to the release.

The October listing of 25 percent of OQ Exploration & Production marked Oman’s largest-ever IPO, signaling deepening liquidity in Muscat’s capital markets, according to the Global SWF May report.

OIA’s roadmap includes 30 more divestments through 2029 across sectors, including logistics, utilities, and aquaculture, aiming to crowd in private capital and raise governance standards. These IPOs are structural tools to deepen Oman’s market while supporting the transition to a knowledge-based economy.

Global investment, local value

Even as it expands abroad, OIA insists every foreign investment must deliver back home— whether in skills, supply chain resilience, or technology transfer. Recent deals illustrate this ethos.

In the US, OIA invested in Tidal Vision, a company developing climate-smart biopolymers. In Singapore, it joined a $100 million venture capital fund with Golden Gate Ventures and helped establish a Muscat-based venture office to incubate deep-tech startups.

In one of its most high-profile moves, OIA took a stake in Elon Musk’s xAI, joining fellow Gulf players like Saudi’s Kingdom Holding and Qatar Investment Authority.

The move links Omani capital to frontier technology while reinforcing the fund’s mandate to back high-potential sectors shaping the global economy.

The OIA’s operational discipline has not gone unnoticed. Since 2021, it has reduced its subsidiary debt by nearly $5.6 billion, standing at $23.92 billion as of the end of the third quarter of 2024. It also refused to issue any new government guarantees last year, according to Global SWF, boosting investor confidence. Ratings agency S&P cited OIA’s reforms and transparency in reaffirming Oman’s BBB- rating with a positive outlook.


Mawani names Al-Mazroua as new president

Updated 24 June 2025
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Mawani names Al-Mazroua as new president

JEDDAH: Saudi Ports Authority has appointed Suliman bin Khalid Al-Mazroua as its new president, effective June 29, as part of its push to strengthen leadership and advance key strategic goals.

Al-Mazroua succeeds Mazen bin Ahmed Al-Turki, who had been serving as acting president and played a key role in several initiatives aimed at developing logistics zones and parks across the Kingdom.

Al-Turki’s most recent contribution included overseeing the signing of a series of new build-operate-transfer contracts valued at more than SR2.2 billion ($586.6 million) to develop multi-purpose cargo terminals at eight Saudi ports.

The appointment of Al-Mazroua, announced by Mawani’s board of directors, underscores the authority’s commitment to supporting the National Transport and Logistics Strategy and Saudi Vision 2030. Both initiatives aim to position the Kingdom as a global logistics hub and a leading industrial power.

In a post on his X account, Al-Mazroua expressed his appreciation for the board’s trust and pledged to further the authority’s strategic goals.

“I extend my sincere thanks and appreciation to His Excellency the Minister of Transport and Logistics Services and Chairman of the Board of the Saudi Ports Authority, Eng. Saleh bin Nasser Al-Jasser, as well as to their Excellencies and distinguished members of the board for this generous trust,” he said.

Al-Mazroua  added: “I pray to God for success in serving our blessed country and fulfilling the aspirations of our visionary leadership. I am also very pleased to work alongside my colleagues at the Saudi Ports Authority.”

In a statement, the authority said that Al-Mazroua “affirmed his commitment to advancing Mawani’s strategic objectives and enhancing its performance in line with its development plans and transformation programs.”

Before assuming his new role, Al-Mazroua served as CEO of the National Industrial Development and Logistics Program, where he played a key role in driving economic diversification and enhancing infrastructure in key sectors, including industry, mining, energy, and logistics.

“He also played a key role in stimulating investment in these sectors with the aim of increasing their contribution to the Kingdom’s gross domestic product, promoting innovation, enhancing local content, and advancing the Fourth Industrial Revolution,” the statement added.

With more than two decades of professional experience, Al-Mazroua has held several senior leadership positions, including at Saudi Aramco from 2001 to 2017.

Over the years, he progressed from technical roles to executive leadership, contributing to the establishment of research and development centers, strengthening cybersecurity frameworks, and advancing health care sector initiatives.

He also worked at US-based Aruba Networks from November 2006 to July 2007 and previously served as a quality assurance engineer at California-based Caspian Networks.

In addition, Al-Mazroua led the National Transformation Program and the Delivery and Rapid Intervention Center, where he contributed to planning, monitoring, and accelerating the implementation of development initiatives in support of Vision 2030.

He is also a member of several boards, including the Center for the Fourth Industrial Revolution in Saudi Arabia and Marafiq Co.


Saudi Arabia, Bahrain launch 2nd phase of industrial integration 

Updated 24 June 2025
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Saudi Arabia, Bahrain launch 2nd phase of industrial integration 

RIYADH: Saudi Arabia and Bahrain have launched the second phase of their industrial integration initiative, aiming to boost bilateral trade, investment, and cross-border supply chain cooperation. 

Announced on the sidelines of the Saudi Industry Forum 2025 in Dhahran, Khalil Ibn Salamah, the Kingdom’s deputy minister for industrial affairs, emphasized that the new phase would build on prior successes between the two countries. 

This comes amid strengthening economic ties between the countries, with the Saudi Arabia’s direct investments in Bahrain reaching SR35 billion ($9.33 billion) in 2023 — representing approximately 20 percent of total foreign investments — and 1,550 Saudi-registered companies operating in the country, as revealed by the Kingdom’s Minister of Investment, Khalid Al-Falih, during a business forum earlier this year. 

In an official statement marking the latest announcement, the Saudi Ministry of Industry and Mineral Resources stated: “The second phase of industrial integration between the two countries focused on setting specific targets, including enhancing intra-trade in industrial goods, attracting industrial investments.” 

It added that this will help “integration in the field of industrial infrastructure and supply chain integration,” as well as identifying a list of export opportunities for non-oil goods and facilitating procedures for exporters and investors. 

The initiative is part of broader efforts under the Gulf Cooperation Council Economic Agreement, which aims to increase the industrial sector’s contribution to regional GDP and foster industrial coordination among member states “on an integrated basis,” according to the ministry. 

The second phase builds on earlier efforts, including the Future Factories Program, which helped shift production in both countries from labor-intensive to advanced manufacturing, along with aligning policies to treat local products as national goods and streamline customs processes. 

As part of the second-phase launch, Ibn Salamah inaugurated the Bahraini Investors Services Office in Dammam’s Third Industrial City. The event was attended by Bahrain’s Minister of Industry and Commerce, Abdullah bin Adel Fakhro. 

“The office aims to attract quality industrial investments and provide all industrial investment services to investors,” the ministry noted. 

Positioned strategically near Bahrain, approximately 130 km away, Dammam’s Third Industrial City offers a robust industrial ecosystem. 

Spanning 48 million sq. meters, the site features extensive infrastructure including a modern road network, energy and water supply systems, and logistical connectivity through its proximity to King Fahd Port, King Fahd International Airport, and the dry port in the city of SPARK. 

The Saudi Industry Forum also highlighted how the new office will offer a “package of services and enablers from the industrial and mining system to facilitate the journey of Bahraini investors,” further underscoring both countries’ commitment to deepening industrial and economic ties.


Petcare and snacking support Saudi consumer spending resilience: NielsenIQ

Updated 24 June 2025
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Petcare and snacking support Saudi consumer spending resilience: NielsenIQ

RIYADH: Consumer spending in Saudi Arabia remained resilient in the year to March, with outlays on low-cost goods rising 3.3 percent, according to a new report by NielsenIQ.  

The analysis by the consumer intelligence company showed that spending on tech and durables also rose by 0.2 percent.

The findings are in line with data recently released by the Saudi Central Bank, which showed that Saudi consumer spending hit an all-time high in March, surging 17 percent to SR148 billion ($39.45 billion) — the highest monthly figure since May 2021 — before easing to SR113.9 billion in April.

The trend is further supported by the increased use of digital point-of-sale transactions and rising e-commerce activity through Mada card payments. 

In NielsenIQ’s report, Andrey Dvoychenkov, general manager at the firm, credited the strategic visions and initiatives across the region for helping to drive continued economic momentum.

“We’re seeing strong growth in both premium and value segments, and a rapid evolution in retail channels — especially online. For brands, success hinges on relevance, agility, and a deep understanding of consumer expectations,” Dvoychenkov added.  

The report also revealed that in the UAE spending on so-called fast-moving consumer goods climbed 7 percent, while tech and durables outlays reached $5.3 billion — up 2 percent year on year.

Top product trends 

In Saudi Arabia, category performance pointed to changing consumption priorities. Petcare saw the strongest growth at 10 percent, followed by snacking at 9 percent, while paper products and home care posted declines.  

In the UAE’s fast-moving consumer goods growth was driven by higher spending on snacking, beverages, dairy, and frozen foods, with personal care up 6 percent. 

Growth in tech and durables was led by smartphones, media tablets, vacuum cleaners, and headsets.  

Retail formats are evolving, with traditional trade channels in the UAE posting 10 percent growth in fast-moving consumer goods — outpacing organized retail at 3.2 percent — while tech and durables growth remained evenly distributed across formats. 

E-commerce continues to expand, accounting for 30 percent of sales of tech and durables and 11 percent of fast-moving consumer goods in the UAE — up from 9 percent a year ago. 

In Saudi Arabia, tech and durables e-commerce sales rose 7.7 percent, and fast-moving consumer goods’ online share increased by 1.4 percentage points. 

More choice for consumers

NielsenIQ’s latest report showed that Saudi Arabia is now home to over 10,500 active brands, up 5 percent year over year, and nearly 100,000 stock keeping units, or SKUs.  

In the UAE, brand count rose 6 percent to 13,000, with SKUs reaching 130,000. In tech and durables, brand activity expanded 18 percent in the UAE and 21 percent in Saudi Arabia, with both markets seeing SKU growth of more than 50 percent.  

Consumer spending is increasingly polarized between value and premium segments. Both Saudi Arabia and the UAE recorded double-digit growth in these areas within fast-moving consumer goods.  

In tech and durables, value-focused categories grew 6 percent in Saudi Arabia and 3 percent in the UAE, underscoring a heightened sensitivity to price and increased availability of cost-effective options.  

The NielsenIQ’s findings backup a 2024 joint report by UAE-based gifting marketplace Flowwow and partner marketing platform Admitad which showed that online order volumes rose by 9 percent in Saudi Arabia and 7 percent in the UAE, highlighting the foundational strength of digital consumer activity in both markets.  

An analysis of over 6.8 million transactions across the Middle East and North Africa placed Saudi Arabia, the UAE, and Kuwait among the top contributors by gross merchandise value, reflecting high levels of consumer engagement and sustained investment in digital channels. 

Consumer confidence high 

Saudi Arabia’s growth aligns with continued positive readings in consumer sentiment. The May 2025 Primary Consumer Sentiment Index, released by Ipsos, recorded a score of 72.2, marginally down from 72.4 in April.  

The Kingdom remains among the top-performing countries globally on key economic indicators, with 64 percent of respondents rating the current economy as strong.  

Additionally, 40 percent said their personal financial situation is strong, and 77 percent felt more confident about their ability to invest in the future compared to six months ago.  

Looking ahead, 84 percent expect their local economy to strengthen over the next six months, though confidence in job security has softened slightly, particularly among resident Arab and Asian expatriates. 

The region’s growing economic appeal has intensified competition, particularly in the fast-moving consumer goods sector.  

As economic growth in the Gulf continues to outpace the global average — 3 percent for Saudi Arabia and 4 percent for the UAE in 2025, compared to 3.2 percent globally — brands face a growing need to adapt strategies to navigate a digitally connected, value-conscious, and increasingly competitive consumer environment. 


Fitch affirms Abu Dhabi rating at ‘AA’ with stable outlook

Updated 24 June 2025
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Fitch affirms Abu Dhabi rating at ‘AA’ with stable outlook

RIYADH: Abu Dhabi’s long-term foreign-currency rating has been affirmed at “AA” with a stable outlook by Fitch, supported by the emirate’s robust fiscal surpluses, vast sovereign assets, and low debt levels.

The US-based rating agency noted that while Abu Dhabi maintains a strong fiscal position, factors such as its dependence on hydrocarbon revenues, a still-evolving policy framework, and governance metrics that lag behind some of its counterparts present ongoing considerations.

This follows S&P Global’s recent assignment of a “AA/A‑1+” with a stable outlook for its foreign and local currency sovereign credit ratings to the UAE, citing the country’s strong fiscal and external positions. The agency also noted that the UAE’s sizable asset cushion would help shield it from oil price volatility and regional geopolitical tensions.

Despite these structural limitations, Abu Dhabi’s fiscal position remains one of the strongest among Fitch-rated sovereigns. At the end of 2024, government debt stood at 17.4 percent of gross domestic product, well below the peer median of 48.8 percent, and is expected to rise only marginally to 18.2 percent by 2026 due to local currency issuance aimed at supporting domestic debt market development.

In its latest report, Fitch stated: “We project a budget surplus of 7.0 percent of GDP in 2025 (3.1 percent excluding investment income) based on Fitch’s oil price (Brent USD65/b) and production (3.2m b/d) forecasts, and some spending under-execution, down from 9.9 percent in 2024.

It added: “For 2026, higher oil production, modest spending growth and the start of corporate income tax receipts will widen the surplus to 8 percent (4.3 percent excluding investment income).”

The report noted that Abu Dhabi’s fiscal breakeven oil price is estimated at $42.60 per barrel in 2025, or $54.30 excluding investment income, highlighting the emirate’s resilience to oil market fluctuations.

If oil prices decline, the government can maintain economic stability by adjusting spending or drawing on dividends from Abu Dhabi National Oil Co.

According to Fitch, sovereign net foreign assets are estimated to have reached 255 percent of GDP at the end of 2024, with a substantial portion of surpluses allocated to government-related entities such as Abu Dhabi Developmental Holding Co. and Mubadala. Some funds are also expected to support MGX, a joint venture focused on artificial intelligence investments.

Fitch added that contingent liabilities stemming from government-related entities debt, estimated at 48.3 percent of GDP in 2023, remain manageable given their asset bases, profitability, and the state’s fiscal strength.

Borrowing by government-related entities is anticipated to rise gradually as Abu Dhabi accelerates investment in non-oil sectors.

The agency also highlighted strong non-oil growth, which reached 6.2 percent in 2024. Overall GDP growth stood at 3.8 percent last year, tempered by lower oil output in line with OPEC+ quotas.

Fitch forecasts headline growth to rise to 6.3 percent in 2025 and 4 percent in 2026, driven by easing oil production constraints and increasing population levels.

The ratings agency warned that elevated geopolitical risks, particularly regional tensions involving Iran, Israel, and the US, pose a downside risk.

“A regional conflagration would pose a risk to Abu Dhabi’s hydrocarbon infrastructure and to Dubai as a trade, tourism and financial hub. Gulf maritime trade is a vital interest of the UAE,” the report said, though it added that the emirate’s large reserves provide protection against short-term disruptions.

Fitch’s sovereign rating model assigned Abu Dhabi a score equivalent to “AA+.” However, the agency applied a negative qualitative adjustment of one notch due to the emirate’s high dependence on oil revenues and geopolitical vulnerability.

The UAE’s country ceiling was affirmed at “AA+,” two notches above the sovereign rating, supported by strong constraints against capital controls, a dollarized financial system, and ample external buffers.

The agency stated that a downgrade could be triggered by a significant erosion of fiscal and external positions or a geopolitical shock that undermines macroeconomic stability. Conversely, an upgrade would require structural improvements such as reduced oil dependence and enhanced governance metrics.