Savings deposits hit highest share in 16 years as Saudi money supply climbs to $815bn

Savings deposits hit highest share in 16 years as Saudi money supply climbs to $815bn
Term deposits have become more attractive to Saudi savers seeking to lock in interest income amid volatile economic signals. Shutterstock
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Updated 22 May 2025
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Savings deposits hit highest share in 16 years as Saudi money supply climbs to $815bn

Savings deposits hit highest share in 16 years as Saudi money supply climbs to $815bn
  • Shift reflects changing behavior among depositors, increasingly favoring interest-bearing accounts
  • Currency outside banks rose by 10.57% to SR251.53 billion

RIYADH: Saudi banks’ money supply rose 8.22 percent year on year to SR3.06 trillion ($815 billion) in March, driven by a sharp surge in time and savings deposits, recent data showed.

According to figures by the Saudi Central Bank, also known as SAMA, this category increased by 27.55 percent during the period to reach SR1.07 trillion, the greatest growth rate in over 14 months. It now accounts for 35.2 percent of the total money supply, marking its highest share in 16 years.

The notable shift reflects changing behavior among depositors, increasingly favoring interest-bearing accounts amid ongoing global monetary tightening.

While the US Federal Reserve kept rates steady in recent months following 100 basis points of cuts last year, the risk of renewed inflation, partly due to rising import tariffs, may have delayed further easing.




S&P Global Ratings revised Saudi Arabia’s outlook to positive in September. Shutterstock

Given that SAMA typically mirrors Fed rate decisions to maintain the riyal’s dollar peg, this has reinforced the appeal of yield-generating instruments like term deposits among Saudi savers.

Term deposits, which offer higher returns than conventional bank accounts in exchange for holding funds over a fixed period, have become more attractive to Saudi savers seeking to lock in interest income amid volatile economic signals.

Despite this surge, demand deposits, accounts that allow immediate access to funds, still hold the largest share at 47.84 percent, or SR1.46 trillion. However, this marks their lowest proportion in nearly five years.

Growth in this category slowed to 3.9 percent year on year, reflecting a broader migration toward savings products.

Meanwhile, quasi-money deposits, which include foreign currency deposits and marginally liquid instruments, declined by 22.85 percent to SR266.87 billion, representing 8.73 percent of the total.

Currency outside banks rose by 10.57 percent to SR251.53 billion.




Efforts to diversify beyond its oil economy would mitigate the Kingdom’s vulnerability to oil market fluctuations. File/Reuters

Credit to businesses in the Kingdom has witnessed robust growth in recent quarters, underpinned by increased demand from key sectors such as real estate, construction, manufacturing, and broader non-oil economic activities. 

According to data from SAMA, corporate lending grew by over 22 percent year on year in March, reflecting the banking sector’s critical role in financing Vision 2030-linked projects and supporting economic diversification.

This strong lending momentum has contributed to a tightening liquidity environment. As loans continue to grow at a faster pace than deposits, reflected in the rising loan-to-money supply ratio, which climbed from 95 percent in March 2024 to 101.51 percent in March 2025, banks have increasingly turned to capital markets to maintain liquidity.

In particular, Saudi banks have ramped up their sukuk issuances and other debt instruments to meet financing demand while preserving balance sheet stability.

For example, several major financial institutions, including Al Rajhi Bank and Saudi National Bank, have recently raised multibillion-riyal sukuk to bolster their funding base.

Saudi Arabia’s expanding reliance on debt markets to fund its ambitious development agenda has been met with continued confidence from major credit rating agencies, reflecting the Kingdom’s robust fiscal position and commitment to economic diversification.




Saudi banks have ramped up their sukuk issuances and other debt instruments to meet financing demand. Shutterstock

In 2024, the total value of listed sukuk and debt instruments in the Kingdom rose by more than 20 percent year-on-year, reaching SR663.5 billion, up from SR549.8 billion in 2023, according to data from the Capital Market Authority. This marks a significant acceleration in domestic debt issuance, underscoring the sector’s growing dependence on capital markets to maintain liquidity amid sustained loan expansion.

Moody’s Investors Service upgraded Saudi Arabia’s credit rating to “Aa3” from “A1” in November, citing the country’s efforts to diversify beyond its oil economy.

The agency noted that these diversification efforts would mitigate the Kingdom’s vulnerability to oil market fluctuations and the global carbon transition over time.

Similarly, S&P Global Ratings revised Saudi Arabia’s outlook to positive in September, affirming its “A/A-1” ratings.

The agency highlighted the Kingdom’s strong non-oil growth outlook and economic resilience, expecting an acceleration of investments to develop newer industries, such as tourism, and diversify the economy away from its primary reliance on the upstream hydrocarbon sector.

These affirmations by major credit rating agencies underscore the nation’s solid creditworthiness and the effectiveness of its economic reforms under Vision 2030, even as it increases borrowing to finance its transformative projects.


Saudi Arabia’s industrial, logistics sectors add $263bn to non-oil GDP in 2024

Saudi Arabia’s industrial, logistics sectors add $263bn to non-oil GDP in 2024
Updated 9 sec ago
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Saudi Arabia’s industrial, logistics sectors add $263bn to non-oil GDP in 2024

Saudi Arabia’s industrial, logistics sectors add $263bn to non-oil GDP in 2024

RIYADH: Saudi Arabia’s National Industrial Development and Logistics Program contributed SR986 billion ($262.8 billion) to the Kingdom’s non-oil gross domestic product in 2024, accounting for 39 percent of the total, according to the program’s annual performance report. 

This figure marks an increase from SR949 billion in 2023 and underscores NIDLP’s central role in advancing the goals of Vision 2030 to diversify the Saudi economy beyond oil. 

The report highlighted substantial progress across the program’s strategic sectors — industry, mining, energy, and logistics — demonstrating what NIDLP described as a “qualitative transformation” in the national economy. 

The total contribution of non-oil activities to the broader GDP reached 55 percent, with the manufacturing sector alone growing by 4 percent, and both mining and transport/storage sectors expanding by 5 percent. 

Saudi Arabia’s broader economic performance in 2024 reflected resilience amid oil market fluctuations, with overall GDP growing by 1.3 percent for the year, driven primarily by expansion in non-oil sectors, according to data from the General Authority for Statistics. 

Launched in 2019, NIDLP aims to integrate key sectors and leverage local content and the Fourth Industrial Revolution to build a diversified and value-added economic base. 

The 2024 report details a range of achievements that indicate continued momentum toward these long-term economic transformation goals. 

"The number of executive initiatives under the program reached 284 by the end of 2024, of which 163 have been completed, with a completion rate of 57 percent, confirming the pace of achievement and the program’s ability to deliver impact,” the report quoted Minister of Industry and Mineral Resources Bandar Alkhorayef, also chairman of the NIDLP Committee, as saying.  

“The total number of employees in NIDLP sectors surpassed 2.43 million, including more than 508,000 new jobs created during the year. Among those, over 81,000 were taken up by Saudi nationals,” he added in the report. 

Non-oil exports reached a total value of SR514 billion in 2024, reflecting a 13.2 percent year-on-year increase. 

Of this, SR217 billion came from non-oil goods exports, which rose by 4 percent. 

Re-exports surged 42 percent to reach SR90 billion, while services exports climbed 14 percent to SR207 billion. 

Chemicals topped the export categories with SR78.5 billion, followed by electrical equipment at SR42.9 billion, metals and metal products at SR23.3 billion, and food and beverage products at SR10.5 billion. 

The labor market also saw strong gains. Total employment across NIDLP sectors reached 2.433 million workers in 2024. 

The program created more than 508,000 new jobs last year, including over 81,000 roles for Saudi nationals — 42,000 for men and 39,000 for women. 

Key employment drivers included manufacturing, mining and quarrying, electricity and gas, and logistics. 

Non-government investments in program sectors reached SR665 billion. The Saudi Industrial Development Fund’s cumulative loan approvals totaled SR198 billion, while export credit facilities issued by the Saudi Export-Import Bank stood at SR69.14 billion. 

Industrial activity expanded significantly, with 12,589 industrial establishments recorded by year-end. 

The number of ready-built factories reached 1,511. Non-government investments in industrial cities and special zones totaled a cumulative SR1.41 trillion.    

The local defense industry also advanced, with cumulative sales by domestic companies hitting SR34.32 billion. 

The national industrial strategy continues to push for the localization of supply chains in sectors like medical supplies, automotive, energy-related products, and petrochemicals. 

In renewable energy, the program recorded significant progress. Total renewable energy capacity initiated in 2024 reached 20 gigawatts, including 3.7 GW of new solar project agreements and 3.6 GW of new commercial operations. 

The lowest recorded wind energy cost globally was also achieved, at 5.87 halalas per kilowatt-hour. These efforts contributed to an annual carbon emissions reduction of approximately 1.7 million tonnes. 

In mining, exploration spending reached SR228 per sq. km. The number of mining sites offered for competitive bidding increased 380 percent from the previous year. 

The sector aims to contribute SR176 billion to GDP and create 219,000 jobs by 2030. Saudi Arabia was ranked second globally for mining license environment quality, the report stated. 

Logistics witnessed similar advances. A total of 1,056 logistics licenses were issued, while re-export logistics centers expanded to 23 in 2024, up from just two in 2019. 

Port utilization rose to 64 percent, compared to a baseline of 50.2 percent. Customs clearance time was reduced to just two hours, and container throughput reached 7.5 million units. 

Key performance indicators exceeded several targets. Military industrialization localization reached 19.35 percent, surpassing the 12.5 percent goal and up from a 7.7 percent baseline. 

Local content in non-oil sectors reached SR1.231 trillion, above the target of SR1.11 trillion. The number of final licenses issued for promising industries hit 3,107, compared to a target of 845 and a baseline of 169. 

Cumulative exports of promising industries reached SR135.6 billion, exceeding the target of SR98.7 billion. 

The number of re-export-linked logistics centers also surpassed targets, with 23 centers established versus a target of 16. 

At the highest level, NIDLP contributes to three primary pillars of Vision 2030: fostering a vibrant society, creating a thriving economy, and building an ambitious nation. 

One of the six first-tier Vision 2030 objectives that the program directly supports is the development and diversification of the national economy, particularly through job creation and enhanced government performance to promote social responsibility. 

NIDLP also addresses second-tier goals by strengthening private sector participation and maximizing value across key economic sectors. 

The program seeks to improve the competitiveness of Saudi Arabia’s energy sector, enhance local content in oil and gas industries, and promote the development of renewable energy sources. 

Additionally, the program supports the creation of specialized economic zones and the rehabilitation of industrial cities to attract investment and facilitate growth. 

Another key strategic focus of the program is the expansion of non-oil sectors, including mining and downstream industries. 

NIDLP targets the localization of high-potential sectors such as advanced manufacturing and defense industries, while increasing local content across non-oil value chains. 

These initiatives are designed to unlock the full economic potential of the Kingdom’s natural resources and industrial capabilities. 

As part of its logistics mandate, the program also works to establish and improve the performance of logistics hubs, while enhancing domestic, regional, and international connectivity across trade and transport networks.   

These efforts are central to NIDLP’s ambition to solidify Saudi Arabia’s position as a global logistics hub, reinforcing the Kingdom’s strategic role in global supply chains. 

Overall, the program encompasses 96 detailed targets at the third level of Vision 2030 planning, 12 of which are directly linked to NIDLP initiatives. 

These targets serve as the operational backbone for achieving the broader national goals of economic diversification and industrial competitiveness. 


Oman’s telecom sector powers ahead with surge in IoT, mobile connections

Oman’s telecom sector powers ahead with surge in IoT, mobile connections
Updated 55 min 32 sec ago
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Oman’s telecom sector powers ahead with surge in IoT, mobile connections

Oman’s telecom sector powers ahead with surge in IoT, mobile connections
  • Momentum backed by substantial public investment
  • Government aims to digitize approximately 80% of services by 2025

JEDDAH: Oman’s telecom sector grew 15.2 percent by May, with mobile subscriptions reaching 8.13 million and Internet of Things connections rising to 1.55 million amid digital expansion and smart tech adoption, official data showed.

IoT subscriptions surged by 118.7 percent, highlighting the growing demand for smart connectivity across sectors such as logistics, utilities, and manufacturing, the National Center for Statistics and Information said.

Oman’s rapidly expanding digital infrastructure is central to Vision 2040, which focuses on innovation, economic diversification, and improved public services. Meanwhile, growth in fiber optic and fixed 5G subscriptions highlights the shift toward advanced, high-speed connectivity.

According to Mordor Intelligence, a global market research and consulting firm, this momentum is backed by substantial public investment.

In 2022, the government announced a $441.5 million digital transformation initiative to modernize the public sector and deliver seamless smart services to citizens and businesses.

“This commitment is further reinforced by the national Digital Economy Program’s ambitious targets under Oman Vision 2040, which projects the digital economy’s contribution to gross domestic product to rise from 3 percent in 2025 to 5 percent in 2030, ultimately reaching 10 percent by 2040,” Mordor said in a report on the Gulf state’s information and communication technology market.

The sultanate’s digital transformation efforts are further underscored by the Government Digital Transformation Program, known as Tahawul. Oman’s Ministry of Transport, Communications, and Information Technology

The research firm added that the government’s digitalization drive includes a goal of digitizing approximately 80 percent of services by 2025, laying a robust foundation for long-term technological progress across sectors.

Further data from NCSI, also published by the Oman News Agency, showed postpaid mobile subscriptions climbed by 5.6 percent to over 1.23 million by the end of May, compared to the same period last year. Prepaid mobile subscriptions also rose, up 3.1 percent to more than 5.33 million.

Mobile broadband Internet subscriptions reached 5.41 million, while fixed broadband subscriptions increased by 2.6 percent year-on-year to 588,015.

Within the fixed Internet segment, fiber optic services grew by 11.4 percent to 339,279 subscriptions.

Fixed 5G connections rose by 2.1 percent to 215,850. However, legacy technologies are on the decline, with fixed 4G subscriptions falling by 38.1 percent to 19,654, digital user lines dropping by 50.8 percent to 11,806, and satellite Internet accounts shrinking by 2.1 percent to 653.

Other Internet services, such as powerline, Ethernet, and leased lines, also contracted by 12 percent, totaling only 773 subscriptions by the end of the fifth month.

The sultanate’s digital transformation efforts are further underscored by the Government Digital Transformation Program, known as Tahawul, which reached 73 percent overall performance by November, up from 53 percent the previous year.

The government has streamlined and digitalized thousands of public services, with four key entities, including the Telecommunications Regulatory Authority, achieving advanced digital excellence.

The progress aligns with Oman Vision 2040’s priorities and is supported by major digital infrastructure projects, such as the upcoming unified e-government portal and the National Digital Integration Platform, which has processed over 1.4 billion data transactions.

The surge in digital government transactions, reaching nearly 27 million in 2024, reflects the growing public adoption of smart services. By 2025, 80 percent of essential government services are expected to be fully online.


Saudi reserve assets rise to $459bn in May on foreign deposit surge 

Saudi reserve assets rise to $459bn in May on foreign deposit surge 
Updated 20 July 2025
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Saudi reserve assets rise to $459bn in May on foreign deposit surge 

Saudi reserve assets rise to $459bn in May on foreign deposit surge 

RIYADH: Saudi Arabia’s official reserve assets reached SR1.72 trillion ($459 billion) in May, marking a roughly 4.5 percent increase from the previous month. 

Data from the Saudi Central Bank, also known as SAMA, shows the reserve boost was primarily driven by a jump in foreign currency and deposits held abroad, which surged 15.5 percent from April to SR671.27 billion — the highest level in nearly six years. 

The rise in reserves comes as Saudi Arabia navigates a shifting global economic landscape marked by volatile oil prices and rising project-driven imports. 

While oil revenues remain a core contributor to external inflows, the Kingdom has also seen growing non-oil export activity and expanding tourism receipts under its Vision 2030 diversification push.   

These factors, along with disciplined financial account management, have supported external balances and bolstered reserve accumulation, even as the current account surplus narrows.  

Despite this sharp monthly uptick, reserves were still about 2 percent lower compared to May of the previous year, according to SAMA data. 

The central bank’s largest reserve component — investments in foreign securities — fell by roughly 2 percent month on month to around SR955 billion.   

Together, these two categories — foreign currency deposits abroad and foreign securities — accounted for approximately 94.5 percent of Saudi Arabia’s total reserve assets in May.  

This suggests a deliberate allocation of reserves into more liquid foreign deposits, even as longer-term foreign securities slightly declined. Shifting more funds into overseas bank deposits could enhance liquidity, allowing the Kingdom quicker access to reserves when needed.   

Other components include monetary gold, which has remained unchanged at SR1.62 billion since 2008; Special Drawing Rights, or SDRs, steady at SR80.16 billion; and Saudi Arabia’s reserve position at the International Monetary Fund, totaling SR12.65 billion.  

The IMF reserve position reflects the amount the Kingdom can access on demand from the fund without any conditions attached. 

According to a January report from Fitch Ratings, in 2024, Saudi Arabia had strong foreign financial reserves. It could cover 14.4 months’ worth of imports and external payments using its reserves — well above the average of around 2 months for countries with a similar credit rating.  

Also, Saudi Arabia’s net foreign assets — total assets abroad minus external liabilities — stood at 63.7 percent of gross domestic product, compared to an average of just 8.7 percent for other “A”-rated countries. This highlights the Kingdom’s robust financial cushion.   

Overall, the rise in reserves to SR1.72 trillion, driven by strategic allocation to foreign deposits and sustained by prudent reserve management, signals continued resilience and confidence in Saudi Arabia’s economic fundamentals. This upward trend also enhances the Kingdom’s ability to absorb external shocks, maintain currency stability, and support long-term investment goals aligned with Vision 2030.  


Reforms, incentives paving way for Saudi Arabia’s rise as logistics hub

Reforms, incentives paving way for Saudi Arabia’s rise as logistics hub
Updated 20 July 2025
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Reforms, incentives paving way for Saudi Arabia’s rise as logistics hub

Reforms, incentives paving way for Saudi Arabia’s rise as logistics hub
  • Kingdom’s logistics market projected to hit $38.8 billionn by 2026, growing at a compound annual rate of 5.85 percent

RIYADH: Saudi Arabia’s logistics sector is emerging as a magnet for global investment, powered by regulatory reforms, incentive schemes, and its alignment with the ambitious Vision 2030 agenda, according to industry experts.

As the Kingdom pushes ahead with economic diversification, strengthening its transport and logistics infrastructure has become a central pillar of the program. 

The National Logistics Strategy aims to transform Saudi Arabia into a global hub by integrating multiple modes of transport, expanding connectivity, and stimulating economic growth.

Speaking to Arab News, Paolo Carlomagno, partner at Arthur D. Little, said global logistics players now view Saudi Arabia not only as a high-growth market but as a strategic regional hub for multimodal operations — spanning the Gulf Cooperation Council region, Red Sea basin, and East Africa — anchored by the Kingdom’s expanding port, airport, and inland logistics network. 

“The Kingdom has opened its logistics ecosystem through full foreign ownership allowances, streamlined customs procedures, and the development of strategic economic zones such as King Abdullah Economic City — collectively reducing barriers for international firms seeking to establish or expand their presence,” said Carlomagno. 

He added: “With a population of approximately 36 million, Saudi Arabia offers significant domestic demand, which — combined with rising trade volumes — is helping transform the Kingdom into a central logistics node for both regional and global flows.”

In January, the Kingdom introduced 15 new incentives under the Authorized Economic Operator program to bolster its export competitiveness. These included streamlined administrative processes, dedicated account managers, and liaison officers to support investors.

Paolo Carlomagno, partner at Arthur D. Little. (Supplied)

Carlomagno said upcoming global events such as Expo 2030 and the 2034 FIFA World Cup would further accelerate the Kingdom’s logistics transformation. Both events are expected to drive infrastructure development, accelerate foreign investment, and unlock new trade corridors, he added. 

Andre Martins, head of transportation, services, and operations for India, Middle East, and Africa at Oliver Wyman, echoed this view. He highlighted Saudi Arabia’s scale, infrastructure investments, and strategic location as key advantages.

“Saudi Arabia’s position as the largest country in the Middle East, combined with significant plans to upscale infrastructure and logistics capabilities, creates a strong foundation for becoming a central logistics hub,” he said, adding that the Kingdom is establishing multiple logistics zones while continuing to upgrade ports and increase rail connectivity with potential east-to-west connections under Vision 2030.

Martins also pointed to the strong domestic demand, particularly in Riyadh, as a growing force behind the Kingdom’s logistics ambitions. 

Government support

According to a December report by the General Authority for Statistics, the number of logistics facilities in Saudi Arabia has surged 267 percent since 2021. A separate report from Maersk in November projected the Kingdom’s logistics market would hit $38.8 billion by 2026, growing at a compound annual rate of 5.85 percent.

Carlomagno pointed to the broader transformation strategy being implemented by the government, particularly the development of logistics zones designed to lower costs, boost connectivity, and drive industrial expansion.

“Recent ZATCA regulatory reforms — notably around less-than-container load handling in seaports — are increasing operational efficiency and making logistics more accessible for small and medium enterprises,” he said.

The Arthur D. Little partner added: “Additionally, the rollout of a national logistics platform (Single Window) is streamlining communication between logistics players and government entities, consolidating permits, customs, and approvals into one digital interface.”

Carlomagno also emphasized growing transparency, citing publicly available data on land, logistics zones, and shipping routes.

“Collectively, these initiatives reflect a coordinated push to make Saudi Arabia a modern, investor-ready logistics ecosystem,” he said.

Martins noted the government’s proactive efforts to attract global firms, offering tax breaks, incentive packages, and access to a large captive market. 

“The Kingdom encourages these international companies by facilitating access to captive demand while providing specific incentive packages and tax advantages to encourage market entry and expansion,” he said.

In December, Saudi Transport and Logistics Minister Saleh Al-Jasser announced plans to increase the number of logistics zones from 22 to 59 by 2030. This includes 18 new zones, backed by investments exceeding SR10 billion ($2.66 billion).

UNCTAD’s 2024 report also highlighted Saudi Arabia’s growing global role, noting a 231-point rise in the Liner Shipping Connectivity Index and the addition of 30 new maritime shipping lines.

In August, Saudi Arabia approved an updated investment law to improve transparency and streamline the investor journey. It guarantees fair treatment, protects intellectual property rights, and enables seamless fund transfers.

Leveraging geography and megaprojects

Saudi Arabia’s geographic location — at the crossroads of Asia, Africa, and Europe — positions it advantageously on the global logistics map, but Carlomagno said this natural strength has historically been underutilized.

“Targeted infrastructure investments — such as port automation, integrated rail and road links, and inland logistics zones — are now enabling the Kingdom to fully harness this potential and position itself as a global logistics hub,” he said.

Martins noted that megacity developments are driving up logistics demand, not only during construction but throughout their operational lifespans.

“The construction and deployment periods require significant flows of goods and materials, while operational cities with resident populations create ongoing logistics needs. With expected continued population growth, demand for logistics services will only increase,” he said.

Carlomagno pointed to NEOM’s Oxagon as a prime example of logistics integration, describing it as “being developed as a next-generation logistics hub.”

He added that it will blend automated ports, AI-driven supply chains, and advanced manufacturing in a single maritime-logistics ecosystem.

“Supporting this is the new NEOM International Airport, which is strategically planned to handle both cargo and passenger volumes at scale, and NEOM Airlines, a new carrier designed to integrate seamlessly with smart logistics and cargo distribution infrastructure,” said Carlomagno.

With e-commerce surging, the Arthur D. Little partner said demand is also rising for fast, tech-enabled logistics services — especially in last-mile delivery, smart warehousing, and fulfillment operations.

A report from Research and Markets in April projected the Kingdom’s e-commerce market, valued at $24.67 billion in 2024, will grow to $68.94 billion by 2033 at an annual rate of 12.10 percent. 

Addressing the challenges

Despite the momentum, experts warned of challenges that need to be addressed to sustain Saudi Arabia’s rise. 

“While Saudi Arabia is moving in the right direction at a good pace, other countries are simultaneously investing in their logistics infrastructure, airports, ports, and platforms. The key challenge is ensuring that market demand, supply, and economics remain commercially viable for all players,” Martins said.

He added: “Additionally, geopolitical uncertainty presents potential risks to plans, and so many players are deploying a certain level of modularity to mitigate geopolitical risks while maintaining competitive positioning.”

Carlomagno pointed out that a shortage of specialized talent — particularly in digital logistics — could pose a hurdle, calling for more training and localization.

He also stressed the importance of sustainable logistics practices to align with global environmental, social and governance standards.

“Addressing these challenges demands a systemic approach that aligns infrastructure, policy, and human capabilities,” he concluded.

 


Jeddah by jet ski: How the Red Sea is powering Saudi Arabia’s new tourism economy

Jeddah by jet ski: How the Red Sea is powering Saudi Arabia’s new tourism economy
Updated 20 July 2025
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Jeddah by jet ski: How the Red Sea is powering Saudi Arabia’s new tourism economy

Jeddah by jet ski: How the Red Sea is powering Saudi Arabia’s new tourism economy
  • Jeddah’s Red Sea coast has transformed into a lively center for marine leisure and luxury tourism

RIYADH: Once a trading port and gateway to holy cities, Jeddah’s Red Sea coast has transformed into a lively center for marine leisure, luxury tourism, and major yachting and water sports events.

This shift shows Saudi Arabia’s Vision 2030 diversification plan in action, with private enterprise working alongside government-led reforms to help deliver new economic developments.

In 2024, Jeddah’s Red Sea tourism figures were robust, with the Jeddah Season attracting over 1.7 million visitors in 52 days, according to the Saudi Press Agency.

This came as the Kingdom as a whole saw a record 30 million inbound tourists in 2024, an 8 percent increase from 2023, with a total inbound tourism spending of SR168.5 billion ($44 million), up 19 percent year on year, according to the Ministry of Tourism.

How the Red Sea coastline in Jeddah changed into a key hub for marine leisure activities 

Developments on hand are part of a larger coastal regeneration plan aimed at establishing Jeddah as a key gateway between the Red Sea and global destinations.

According to Samir Imran, partner at Arthur D. Little Middle East, the Red Sea Global resort is expanding its eco-development along the Red Sea coast, focusing on regenerative tourism, coral reef preservation, and high-end hospitality, noting that resorts like Sheybarah, Six Senses, and Desert Rock are already open, with more set to launch soon.

Samir Imran, partner at Arthur D. Little Middle East. (Supplied) 

“Modern Waterfront & Marinas: Jeddah’s 4.2 km Corniche Waterfront was completely redeveloped and opened, providing parks, beaches, promenades and recreational facilities. Now named the Roshn Waterfront, this seaside promenade attracts over 55 million visitors each year who come to exercise and enjoy Red Sea views,” Imran said.

He explained that the Jeddah Yacht Club & Marina, which opened in 2022, is Saudi Arabia’s first luxury tourist marina, offering 101 deep-water berths, superyacht services, and positioning Jeddah as a key hub for the Kingdom’s growing tourism sector.

Similarly, PwC Middle East Partner and Global Tourism Industry Lead, Nicolas Mayer, elaborated on how Jeddah’s Red Sea coast has become a top tourism destination, offering a mix of heritage, culture, and marine leisure that appeals to today’s experience-driven travelers.

“There’s also been rapid growth in nature-based activities. Snorkeling, fishing trips, and coral reef tours now feature alongside kayaking, bird watching, and excursions into the coastal wetlands. These options open the door to everything from a morning adventure to a multi-day itinerary,” Mayer said.

“What makes Jeddah special is how well all of this comes together. You can start your day in a historic district and end it on a jet ski or dining seaside. For many visitors, this mix of experiences is what makes Jeddah feel like a real destination, not just a single attraction,” he added.

How the Saudi Vision 2030 is influencing the coastal renaissance in Jeddah

Jeddah’s marine luxury growth stems from the Kingdom’s Vision 2030, which drives tourism, economic diversification, and quality of life, with the coastline showcasing these efforts.

From Arthur D. Little’s side, Imran explained that Saudi Arabia has introduced major regulatory reforms to boost marine tourism, including tourist e-visas, lifting the ban on foreign-flagged yachts, and establishing the Red Sea Authority to issue licenses and oversee the sector’s growth.

“By establishing defined entry points with customs facilities and streamlining yacht permit procedures, the Kingdom eliminated longstanding barriers, making it more accessible and connected to the global community,” he said.

The partner went on to say that under Vision 2030, the nation has heavily invested in the area’s tourism infrastructure, including the Jeddah Central Project, backed by the Public Investment Fund, which is expected to feature a new waterfront, marina, beaches, and cultural landmarks by 2027.

At the same time, the government is encouraging private-sector participation through regulatory reforms and incentives, leading to partnerships like Cruise Saudi and MSC Cruises, all aimed at transforming Jeddah into a global marine tourism hub.

He added that the area’s coastal transformation is fueling Saudi Arabia’s tourism boom. As marine attractions grow, so does local spending and job creation, with Red Sea tourism expected to add SR85 billion to gross domestic product and create 210,000 jobs by 2030.

“In Jeddah, one can already see the impact in the hospitality sector: dozens of new restaurants, cafes, and boutique hotels have sprung up along the revitalized Corniche, employing Saudi youth and diversifying the local economy,” Imran said.

He concluded by saying that marine sports in Jeddah are boosting local talent, with over 1,000 Saudis trained in 2024 for roles like dive instructors and marina managers. Vision 2030 has also enabled women to join the sector, competing in sailing and powerboat racing. These efforts are creating a cycle of stronger infrastructure, workforce inclusion, and rising tourism.

Additionally, Vision 2030 has driven Jeddah’s shift from standalone projects to integrated coastal destinations, fostering long-term tourism growth and job creation.

“In Jeddah, we’re seeing a sharp rise in new job categories tied to the marine economy. Tour operators, diving instructors, marina staff, fishing guides, and jet ski rental businesses are expanding fast. Yacht chartering and high-end marine hospitality are growing too,” PwC’s Mayer said.

Nicolas Mayer, partner at PwC Middle East. (Supplied)

He continued to stress that upscale waterfront dining is boosting demand for a wide range of hospitality roles, supported by local training programs.

Meanwhile, the “Umrah Plus” trend is encouraging religious visitors to extend their stays for cultural and leisure experiences, creating new jobs and aligning with Vision 2030’s goals of economic diversification and investment in people.

The future development of Jeddah’s marine

Arthur D. Little’s Imran noted that Jeddah’s Red Sea coast is set to strengthen its position as a marine luxury hub, combining heritage with modern coastal appeal. With strong infrastructure already in place, experts are optimistic about continued rapid growth.

“The Al-Arbaeen Lagoon revival, with its new yacht marina and 4.4 km park, is actively under construction in 2025. These will add capacity for more boats and more visitors. Cruise tourism is also ramping up, Jeddah’s port is now a home base for Red Sea cruises, introducing yet another stream of maritime tourists exploring the coast,” he said.

“We can expect tourist volumes in Jeddah to keep climbing as air connectivity improves and as word spreads about its Red Sea treasures,” the ADL partner added.

Private and global investors are playing a bigger role in Jeddah’s tourism growth, aiming to serve 19 million coastal visitors by 2030, many from the region, Imran clarified.

He noted that experts view Jeddah’s Red Sea location as ideal for year-round yachting, positioning it as a strong alternative to winter destinations such as the Caribbean or Dubai.

From PwC’s perspective, Mayer justified that the Red Sea Authority will ensure future growth stays sustainable and coordinated, while the city’s active private sector helps drive innovation and preserve its unique character.

“We’ll likely see growth in multi-day yacht itineraries that link Jeddah to quieter parts of the coast. Cruise tourism might also become a bigger part of the mix, especially as infrastructure improves. Water taxis, floating hotels, and digitally enhanced marine experiences, like virtual dive guides, could help the city appeal to younger travelers and tech-savvy tourists,” Mayer said.

He added: “Jeddah also benefits from its position as both a cultural capital and a transit hub for religious tourism. That makes it a natural gateway. Travelers might start their trip with Umrah or a visit to Al-Balad and then head to the coast for a few days of nature and leisure.”