IMF sees Saudi inflation contained at 2.8% as GDP growth hits decade-high

Update Saudi Arabia is rebounding strongly from the pandemic-induced recession, driven by the Kingdom’s pro-business reforms and higher oil prices.
Saudi Arabia is rebounding strongly from the pandemic-induced recession, driven by the Kingdom’s pro-business reforms and higher oil prices.
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Updated 17 August 2022

IMF sees Saudi inflation contained at 2.8% as GDP growth hits decade-high

IMF sees Saudi inflation contained at 2.8% as GDP growth hits decade-high

RIYADH: Saudi Arabia’s gross domestic product is expected to grow at the fastest rate in almost a decade at 7.6 percent with inflation likely to remain at 2.8 percent in 2022, the International Monetary Fund’s Article IV Consultation report has predicted.
Saudi Arabia is rebounding strongly from the pandemic-induced recession, driven by the Kingdom’s pro-business reforms and higher oil prices, it said. 
Despite higher prices for imported commodities, the inflation rate in the Kingdom will be contained at 2.8 percent in 2022, as the central bank tightens policy in line with the US Federal Reserve, the report added. 
“Liquidity and fiscal support, reform momentum under Vision 2030, and high oil prices and production helped the economy recover with robust growth, contained inflation and a resilient financial sector,” the IMF said in a press release.

HIGHLIGHTS

The proportion of Saudi women in work has doubled in the past four years to 33% in the first quarter of 2022.

83 percent of the adult population now own a bank account as of 2021, up from 71 percent in 2019.

At a press conference on Wednesday, Amine Mati, assistant director of the IMF, predicted that Saudi Arabia is expected to attain a budget surplus of about 5.5 percent of its gross domestic product, as its surplus in the second quarter hit $21 billion.

Mati elaborated that effective utilization of the Kingdom’s growing surplus will be achieved by making sure that the budget allocations are respected. He added that social spending should remain in line with the increase in surplus, which would then be re-injected into the economy.

“Implementing a fiscal rule will help sustain a fiscal anchor over the medium term and integrated asset liability management framework will help the government assess Saudi Arabia’s fiscal stance and position,” said Mati.

The IMF report added that the increase in interest rates is expected to have only a limited impact on the Saudi economy. 

When addressing the rising inflationary pressures, Mati stated that “the exchange rate peg to the US Dollar continues to serve Saudi Arabia.”

“Inflation is contained, despite increased international commodity prices, because of low pass through,” said Mati. “The external position is expected to strengthen substantially, with the current account surplus reaching levels not seen in a decade.”

The IMF report added that the increase in interest rates is expected to have only a limited impact on the Saudi economy. 
Mati explained that the increase of the value-added tax from 5 percent to 15 percent in the middle of the COVID-19 pandemic was essential in promoting non-oil revenue growth, and noted that tax administration measures also help sustain and accelerate tax revenues.

According to the report, the Public Investment Fund should focus on high return projects with private involvement, as it continues to implement giga-projects. 
The report added that Saudi Arabia is taking impressive steps to improve the business environment, which will attract foreign investments. 
It further stated that the proportion of Saudi women in work has doubled in the past four years to 33 percent in the first quarter of 2022, exceeding the 30-percent target set under the Vision 2030 plan. 

Improvements in tax policy and revenue administration to raise more taxes from non-oil activities will help support fiscal consolidation in the Kingdom.

IMF


“Priorities to foster a more inclusive and green economy include increasing further women labor force participation, making sure PIF interventions play a catalytic role, strengthening governance, and rolling out the Saudi green initiative,” the IMF said in the report. 
The impressive pace of digitization in the Kingdom has the potential to boost productivity and overall growth, it added. 

“The surge in digital account openings and online mobile financial transactions during the pandemic has helped in improving financial inclusion — 83 percent of the adult population now own a bank account as of 2021, up from 71 percent in 2019,” it said. 

Speaking at the conference, Mati stated that the advancement of digitalization translates to a more educated workforce that is better equipped for following up on future developments, which positively impacts the future of FDI.

According to the IMF, the Saudi Green Initiative, which was launched in 2021, requires policy measures to reduce greenhouse gas emissions and support greener growth. 
The report concluded that Saudi Arabia’s economic outlook is strong, and the Kingdom’s long-term prosperity strongly depends on sustaining the reform momentum.


Qatar reviewing London investments after advert ban: Report

Qatar reviewing London investments after advert ban: Report
Updated 26 November 2022

Qatar reviewing London investments after advert ban: Report

Qatar reviewing London investments after advert ban: Report
  • City’s transport authority bans adverts by Gulf state reportedly due to human rights concerns
  • Decision ‘interpreted as message that Qatari business not welcome in London,’ source tells FT

LONDON: Qatar is reviewing its London investments following a decision by the city’s transport authority to ban Qatari adverts from its bus, taxi, train and underground network, the Financial Times reported.

Transport for London’s decision is reportedly due to concerns about the World Cup host’s human rights record.

A person involved with the review told the FT that the Gulf state is “reviewing current and future” London investments and “considering investment opportunities in other UK cities.”

The source added that the ban has been “interpreted as a message that Qatari business is not welcome in London.”

Through its sovereign wealth fund, Qatar is now one of the biggest investors in London, and owns nearly 2.1 million sq. meters of property in the UK.

Among its London assets are the Harrods department store; Britain’s tallest building, The Shard, built with £2 billion ($2.4 billion) of Qatari investment; the Savoy and Grosvenor House hotels; co-owning Canary Wharf; and a 20 percent stake in Heathrow Airport.

In May, Qatar pledged to invest £10 billion in the UK over the next five years, including in the technology, healthcare, infrastructure and clean energy sectors.


Saudi Arabia, Morocco sign deal to enhance cooperation in tourism

Saudi Arabia, Morocco sign deal to enhance cooperation in tourism
Updated 26 November 2022

Saudi Arabia, Morocco sign deal to enhance cooperation in tourism

Saudi Arabia, Morocco sign deal to enhance cooperation in tourism

RIYADH: Saudi Arabia and Morocco signed a memorandum of understanding on Friday to encourage and develop cooperation in tourism, and coordinate efforts to achieve the sustainable development of the industry in both countries, the Saudi Press Agency reported.

The memorandum was signed in the presence of Saudi Minister of Tourism Ahmed Al-Khateeb, and Fatima-Zahra Ammor, the Moroccan minister of tourism, handicrafts, and social and solidarity economy, on the sidelines of the 117th session of the executive council meeting of the UN World Tourism Organization.

Al-Khateeb said: “Saudi Arabia and Morocco enjoy a common commitment to protecting the rich heritage sites and natural marine, mountainous and desert areas in both countries, in addition to their keenness to give priority to youth in their development plans.

“The issue of sustainability occupies an important place in Saudi tourism ambitions, so cooperation with partners who have a similar vision, like Morocco, helps to strengthen the sector in our region and the world as a whole, and contributes to consolidating the sustainability, flexibility, and inclusiveness of the tourism sector for the benefit of people and societies.”

The Moroccan tourism minister said: “The memorandum reflects the strong relations between the two countries and the common vision toward strengthening partnership and raising prospects for cooperation in the tourism sector.

“It will lead to more joint initiatives and the exchange of experiences and best practices, allowing the two countries to develop their capabilities in tourism.”

The agreement will also help to support an increase in training and knowledge-sharing opportunities, and provide new openings for investment.

Saudi Arabia is currently one of Morocco’s largest trading partners in the Arab world. In 2020 the Kingdom invested $26.6 million in its real estate, tourism, and agricultural sectors.


Flurry of R&D cooperation deals signed as Sustainable Partnerships Conference ends

Flurry of R&D cooperation deals signed as Sustainable Partnerships Conference ends
Updated 25 November 2022

Flurry of R&D cooperation deals signed as Sustainable Partnerships Conference ends

Flurry of R&D cooperation deals signed as Sustainable Partnerships Conference ends

RIYADH: More than 50 cooperation and research partnership agreements were signed between universities and various sectors at the Sustainable Partnerships Conference held in Riyadh.

The two-day conference, held under the theme “Research and Innovation Towards A Prosperous Economy” was part of an initiative spearheaded by the Ministry of Education to foster ties between Saudi universities and the industrial and development sectors.

The event hosted 150 ministers, decision-makers, local and international leaders — of which 100 were from the industrial and development sector — and 40 Saudi universities and colleges.

Some 1,000 research products and industrial models for universities were presented, according to the Saudi Press Agency.

On the sidelines of the conference, 40 training workshops specialized in research and innovation were held, along with 25 dialogue sessions, in addition to a presentation of 220 scientific inventions through the “Promising Technologies and Innovations” exhibition for the country’s citizens and graduates of Saudi universities.

The conference also saw the Saudi Minister of Investment Khalid Al-Falih announce a new strategy for research and development would soon be launched in the Kingdom.

Saudi Arabia’s Minister of Industry and minimal resources Bandar Al-Khorayef also addressed the forum, revealing that a budget for research and development will be allocated soon. 

Al-Khorayef pointed out that the innovation strategy will enhance Saudi Arabia’s exports, and will contribute to national gross domestic production. 

According to SPA, the Ministry of Education sought to use the conference — the first of its kind in the Kingdom — to not only strengthen the links between the higher education sector and industry, but also to identify research and innovation needs of national priority and provide effective solutions to them.

The event was held with a growing focus on Saudi Arabia’s R&D sector, as the Kingdom seeks to diversify its economy away from oil in keeping with the Vision 2030 program.

Saudi Arabia is aiming to become one of the top 10 countries in the Global Competitive Index by the end of this decade, increasing from 24th in 2022.


Food delivery orders rise as MENA continues embracing digital economy: Report

Food delivery orders rise as MENA continues embracing digital economy: Report
Updated 25 November 2022

Food delivery orders rise as MENA continues embracing digital economy: Report

Food delivery orders rise as MENA continues embracing digital economy: Report

RIYADH: The appetite for food delivery in the Middle East and North Africa region has continued to grow in 2022 after the pandemic kick-started demand for the services in the region, according to a new report.

According to data in ‘Digital Transformation in MENA 2022’, produced by cloud-based payments platform Checkout.com, over half  — 53 percent — of MENA consumers purchased food online in the past year, with 42 percent consumers saying they are buying food online more frequently this year than in 2021. 

The online food ordering sector has numerous moving parts that need to come together in each transaction, from the restaurants to drivers and aggregators to payment providers. Close collaboration is therefore vital for the many stakeholders, noted Ramzi Alqrainy, chief technology officer at The Chefz, a leading Saudi-based food delivery app. 

“Collaboration allows us to innovate effectively and to reach and serve society in its most inclusive sense. These days, one provider doesn’t need to manage all aspects of a consumer experience from A to Z. We all need to work together. This is the death of ownership,” said Alqrainy. 

The findings fit the trend of the region increasingly embracing digital technology.

Data from the report shows that 91 percent of consumers across MENA bought products online in the past year, with fashion and clothing making up 46 percent of all online purchases in the region. A fifth of consumers across the region purchased retail products online more frequently than last year, with 33 percent shopping more often for fashion and clothing online.  

Paul Carey, executive vice president of Cards & Payments at Al-Futtaim Group said the figures point to a rapidly developing digital ecosystem that allows government agencies, established companies and start-ups to flourish.

“This is particularly evident in payments, where governments have set up regulatory sandbox infrastructure and made it easier for businesses in the region with more flexible visa options and commercial licensing,” he added. 

The survey shows that remittance apps remain the most widely utilized form of fintech in MENA, but as other products increase, so does adoption. 

The report found that 82 percent of consumers in MENA use some form of fintech app in 2022, up from 76 percent in 2021. 

Innovation has been underpinned by solutions such as Visa’s Account Funding Transactions which pull funds from an account and for use on a prepaid card, top up a wallet, or fund a person-to-person money transfer. 

“The secure, reliable, and fast movement of digital money between individuals, businesses and governments is the engine powering today’s global economy”, said Saeeda Jaffar, senior vice President and group country manager for the Gulf Cooperation Council region at Visa.

The findings come from the second phase of Checkout.com’s Digital Transformation in MENA 2022 report. 

Part one, which was released in October, included insights from 15,000 consumers in the region, while the latest publication contains interviews with business leaders in the digital economy.


ACWA Power expands Indonesian portfolio thanks to partnership with state electricity firm

ACWA Power expands Indonesian portfolio thanks to partnership with state electricity firm
Updated 25 November 2022

ACWA Power expands Indonesian portfolio thanks to partnership with state electricity firm

ACWA Power expands Indonesian portfolio thanks to partnership with state electricity firm

RIYADH: Saudi energy firm ACWA Power will work with Indonesia’s state-owned electricity provider to develop battery storage for renewable energy facilities and green hydrogen development in the Asian country.

The firm has announced it signed a Memorandum of Understanding with PT Perusahaan Listrik Negara — known as PLN — at the B20/G20 Summit in Bali and coincided with the state visit of thw Kingdom’s Crown Prince Mohammed Bin Salman to Indonesia.

According to the terms of the MoU, ACWA Power and PLN will jointly investigate several avenues of partnership, including a project study for pump storage for a 600-800MW hydroelectricity facility; investigating the possibility of a 4GW battery energy storage system and the development of a green hydrogen/ammonia facility that is powered by hydroelectricity.  

Paddy Padmanathan, CEO and vice chairman of ACWA Power, said: “As a nation that is fast tracking economic growth, Indonesia is focussed on advancing sustainable development through strategic partnerships. 

“With the signing of this extensive renewable energy and green hydrogen MoU with PT Perusahaan Listrik Negara, we are delighted to extend our collaboration and strengthen our presence in the country. 

“We look forward to partnering with the government in ensuring that its renewable energy goals are realized.”

Indonesia’s National General Energy Plan states that 23 percent of the country’s power should be generated via renewable energy sources by 2025. 

PLN is Indonesia’s sole buyer of electricity produced by independent power projects, including power produced from renewable energy projects. 

As of last year, the enterprise owns or operates nearly two-thirds of Indonesia’s power generation industry, which is approximately 65.5GW of electricity.

Darmawan Prasodjo, president director and CEO of PLN, said: “Dealing with climate change is not only a challenge to preserve the environment, but also a business opportunity. 

“In the future, there will be many PLN agendas in the energy transition that require the collaboration of all parties. ACWA Power and PLN have built a very strong, long-term and productive partnership.”

The agreement comes after ACWA Power and Indonesian energy firm Pertamina New & Renewable Energy signed a joint development agreement on core utilities supplies to Tuban Grass Root Refinery and Petrochemical Project in Java, eastern Indonesia.

This agreement was also signed on the sidelines of the G20 summit.