Saudi economic growth projected at 8.3% in 2022: World Bank

Saudi economic growth projected at 8.3% in 2022: World Bank
The World Bank projected that the budget balance will register a surplus of 6.8 percent of gross domestic product in 2022 (Shutterstock)
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Updated 06 October 2022

Saudi economic growth projected at 8.3% in 2022: World Bank

Saudi economic growth projected at 8.3% in 2022: World Bank

RIYADH: Saudi Arabia’s economic growth is expected to accelerate to 8.3 percent in 2022, according to a forecast by the World Bank.

In its report, the organization noted the economic growth of the Kingdom will be moderated to 3.7 and 2.3 percent in 2023 and 2024, respectively.

According to the World Bank, the oil sector will be the key driver of this economic growth with the output estimated to grow by 15.5 percent in 2022, while the non-oil sector is also expected to continue its growth trajectory estimated at 4.3 percent this year.

“The Saudi Arabian economy is on an accelerated growth path in 2022; driven by higher oil and non-oil activities as the oil sector strengthens and pandemic pressures fade,” wrote the World Bank in the report.

The report further noted that headline inflation is expected to stay subdued during 2022 and hover around 2.5 percent as a result of a stronger US dollar, subsidies and price controls, and stable rents.

It added that inflation is expected to average 2.3 percent in the medium term.

The World Bank projected that the budget balance will register a surplus of 6.8 percent of gross domestic product in 2022, the first surplus in nine years, driven by higher oil receipts.

The report pointed out that Saudi Arabia’s economic growth of 11 percent in the first half of 2022 was mainly driven by the oil sector, which registered a rapid 21.6 percent growth rate, while the non-oil sector in the Kingdom also witnessed a rise of six percent in the first half. 

According to the World Bank report, the direct impacts of a prolonged war in Ukraine on Saudi Arabia’s economy are limited due to weak trade and investment flows with Ukraine and Russia. 

The report, however, warned that further sanctions and disruptions to supply chains could adversely affect the Kingdom through slower-than-anticipated global growth and higher import prices. 

On the positive side, higher energy prices and output is expected to further strengthen the external and fiscal position of Saudi Arabia. 

On Oct. 4, S&P Global revealed that Saudi Arabia continues to maintain ongoing expansion in its non-oil economy as output and new orders recorded gains, leaving the Kingdom’s Purchasing Managers’ Index at 56.6 in September.

Earlier in October, Al-Rajhi Capital projected that Saudi Arabia’s real GDP would increase by nearly 8 percent year-on-year in 2022 and 3.1 percent year-on-year in 2023.

Inflation is expected to be 2.6 percent and 2.1 percent in 2022 and 2023 respectively, Al-Rajhi said.

In September, a report published in Economist Intelligence said that Saudi Arabia is expected to become the fastest growing economy in 2022, outpacing Asian giants like China, India, and other struggling economies in Western Europe and North America.

The Economist Intelligence report also projected that the GDP of the Kingdom is expected to reach 7.5 percent this year, the Kingdom’s fastest rate of growth since 2011. 


Saudi Arabia exceeds budget surplus forecast

Saudi Arabia exceeds budget surplus forecast
Updated 18 sec ago

Saudi Arabia exceeds budget surplus forecast

Saudi Arabia exceeds budget surplus forecast

Saudi Arabia has recorded a larger-then-expected budget surplus for 2022 of SR102 billion ($27.13 billion) — SR12 billion higher than previously forecast.

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Saudi’s KAPSARC signs information exchange agreement with Chinese research institute

Saudi’s KAPSARC signs information exchange agreement with Chinese research institute
Updated 07 December 2022

Saudi’s KAPSARC signs information exchange agreement with Chinese research institute

Saudi’s KAPSARC signs information exchange agreement with Chinese research institute

RIYADH: Saudi Arabian think tank King Abdullah Petroleum Studies and Research Center, has signed a Memorandum of Understanding with China’s Economics & Technology Research Institute to exchange information around energy, economics, and climate change

Under the terms of the MoU, both entities will work hand in hand in order to allow for the exchange of research and the generation of actionable insights.

Some of the fields of common interest which will be prioritized topics of research include energy, economics, climate change, sustainability, transition, productivity, hydrogen, carbon capture, among others.

The MoU falls in line with KAPSARC’s mission to utilize applied research and innovation to drive and propel the global energy sector, while the Chinese organization is affiliated with oil and gas firm China National Petroleum Corporation.

“We see a lot of common interest and alignment between China’s and Saudi Arabia's position when it comes to energy and climate. We both understand and reiterate the idea of common but differentiated responsibility when it comes to climate change,” KAPSARC’s president Fahad Alajlan said in a statement.

Through joint workshops, the exchange of ideas and insights between experts, and the creation of platforms that facilitate global cooperation and knowledge exchange, both institutions will work together on deliver research.

“As important energy producers and consumers in the world, China and Saudi Arabia play an important role in maintaining the stability of the international energy market, addressing climate change, and promoting the realization of energy green transformation goals,” added CNPC ETRI’s president Yu Guo.


Saudi bourse crashes to 19-month low, ends at 10,185 points: Closing bell

Saudi bourse crashes to 19-month low, ends at 10,185 points: Closing bell
Updated 07 December 2022

Saudi bourse crashes to 19-month low, ends at 10,185 points: Closing bell

Saudi bourse crashes to 19-month low, ends at 10,185 points: Closing bell

RIYADH: The Tadawul All Share Index collapsed on Wednesday, losing 259.13 points — or 2.48 percent — to close at 10,185.14 points. The last time the index witnessed this level was on April 26, 2021, when the market ended at 10,231.  

The advance-decline ratio took a huge hit, after 158 stocks of the listed 219 dropped while 42 gained. The total trading turnover was SR3.68 billion ($980 million) compared to Tuesday’s SR4.96 billion. 

TASI’s steep fall was driven by the banking index, which fell 448.45 points or 3.88 percent to 11,123.58. While Al Rajhi Bank tumbled 4.88 percent to close at SR74, Riyad Bank shed 4.7 percent to SR30.40. Arab National Bank slumped 4.08 percent to SR30.55. 

The other indices that boarded the southbound bandwagon were MSCI Tadawul 30 Index, which fell by 2.99 percent, Diversified Financials by 2.77 percent, Healthcare Equipment and Services by 2.72 percent and Materials by 2.42 percent.  

According to market sources, the dampened spirit among investors could be attributed to the fear of a global economic downturn. The hunch that the US Federal Reserve could increase interest rates further, following positive US services industry data released on Monday, upset the apple cart. 

The trend is contagious as Saudi Arabia, like most Gulf Cooperation Council countries, has its currency pegged to the US dollar. Therefore, any policy move of the Fed has a direct impact on the regional markets. 

The Qatari index QE General slumped 154.24 points to close at 11,463.07, while the Abu Dhabi index FTSE ADX General declined 71.61 points to end at 10,336.34.  

Back to Tadawul, the top loser of Wednesday was Tourism Enterprise Co., which slid 5.3 percent to close at SR22.90, while the top gainer was Buruj Cooperative Insurance Co. It rose 9.61 percent to end at SR16.66. 

On a positive note, on Wednesday, Scientific & Medical Equipment House Co. bagged a medical operation project tender in the medical centers affiliated with the General Department of Medical Services at a total value of SR8.71 million.  

The project will be implemented in 14 months in four affiliated medical centers across Riyadh, Jeddah, Taif and Al-Muzahimiyah. 


Saudi Arabia’s Ajex expands its logistics services to China and Middle East 

Saudi Arabia’s Ajex expands its logistics services to China and Middle East 
Updated 07 December 2022

Saudi Arabia’s Ajex expands its logistics services to China and Middle East 

Saudi Arabia’s Ajex expands its logistics services to China and Middle East 

RIYADH: Saudi firm Ajex Logistics Services has announced the launch of two new services as a part of its expansion strategy into China and the Middle East. 

The services are the AJEX international e-commerce express, known as ICX, and AJEX international express service, called IXS.  

They will provide businesses in China, Saudi Arabia, UAE, and Bahrain with a portfolio of express cross-border delivery services for customers.  

“Introducing ICX and IXS services in China, Saudi Arabia, UAE and Bahrain is an important enhancement to our service portfolio, driven by our customers’ requirements for speed, reliability, and transparency,” said Ajex's Chief Marketing & Experience Officer Nathalie Amiel-Ferrault.  

She added: “Saudi Arabia is the largest e-commerce market in the Middle East, and the end-consumers expect flexibility, late-night deliveries, and ease of payment, with cash-on-delivery representing more than 30 percent of e-commerce.”   

According to the report, customers will be able to send single-piece and multi-piece shipments from China to Saudi Arabia, UAE and Bahrain in four to seven days.  

Ajex is a joint venture between Ajlan & Bros Holding and SF Express. 

For Saudi Arabia, logistics is a crucial sector to achieve its goals outlined in Vision 2030, as the Kingdom is now diversifying its economy, which has been dependent on oil for several decades.  

Earlier in October, while speaking at the Supply Chain and Logistics Conference in Riyadh, Saudi Minister of Transport and Logistics Saleh Al-Jasser said that the Kingdom is working to inaugurate 59 logistic zones to bolster supply chains and logistic services.  

In June, in an exclusive interview with Arab News, Sulaiman Al-Mazroua, CEO of the National Industrial Development and Logistics Program, noted that the Kingdom’s logistics sector needs a huge investment combined between the government and private sector by 2030.  

He added that Saudi Arabia would provide the right business environment to attract world transportation companies to operate in the Kingdom, which will help the nation emerge as one of the world’s busiest logistics centers. 


Green energy exports at heart of new deal with Saudi EXIM Bank and Korea Trade Insurance Corp

Green energy exports at heart of new deal with Saudi EXIM Bank and Korea Trade Insurance Corp
Updated 07 December 2022

Green energy exports at heart of new deal with Saudi EXIM Bank and Korea Trade Insurance Corp

Green energy exports at heart of new deal with Saudi EXIM Bank and Korea Trade Insurance Corp

 RIYADH: More green energy produced in Saudi Arabia will be exported to South Korea thanks to a new agreement signed between the two countries.

 The Saudi Export-Import Bank has signed a memorandum of understanding with Korea Trade Insurance Corp which will see eco-friendly fuels, including green hydrogen and green ammonia, traded with the Asian nation, the Saudi Press Agency reported.

 As a part of the MoU, both nations will also engage in mutual information exchange on markets and projects.

 According to the report, this deal will also help Saudi’s EXIM Bank to promote the development and diversification of exports to the Republic of Korea, along with providing export financing and guarantee services, securing export credit, and aiding the entry of Saudi products into the Korean market.

 Korea Trade Insurance Corp., also known as K-SURE, is the official export credit agency of the Republic of Korea.

 In October, Saad Al-Khalb, CEO of EXIM Bank, told Arab News that it provided SR20 billion ($5.3 billion) to support the Kingdom’s exports since its establishment in 2020.

 Al-Khalb also noted that the main mandate of EXIM is to support the economy and flow of goods, trades, infrastructure and long-term projects.

 He also added that EXIM Bank always tries to ensure that no Saudi cross-border export fails due to a lack of insurance or financing.

 In May, Saudi EXIM Bank launched its five-year strategic plan, from 2022 to 2026.

 The strategy seeks to close financing gaps and reduce export risks which will help facilitate Saudi non-oil exports to reach various global markets.