Saudi Arabia records budget surplus of $27.68bn; revenue up 31%

Update Saudi Arabia records budget surplus of $27.68bn; revenue up 31%
The Kingdom posted a budget surplus of SR103.9 billion, up from prior estimates of SR102 billion (Shutterstocks)
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Updated 09 March 2023
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Saudi Arabia records budget surplus of $27.68bn; revenue up 31%

Saudi Arabia records budget surplus of $27.68bn; revenue up 31%

RIYADH: Saudi Arabia recorded a 31 percent rise in government revenues to reach SR1.26 trillion ($335.6 billion) in 2022, the Ministry of Finance said on Thursday.

The world’s top oil exporter recorded real gross domestic product growth of 8.7 percent in 2022 leading to the Kingdom’s first budget surplus in almost a decade. The country posted a budget surplus of SR103.9 billion, up from prior estimates of SR102 billion.

Oil revenue reached SR857.3 billion, while non-oil revenue was recorded at SR410.9 billion in 2022. However, non-oil revenue picked up in the fourth quarter, rising 19 percent from the prior-year period, outperforming oil revenue which increased 17 percent in the fourth quarter, according to a report from the Finance Ministry.

Total spending in 2022 rose 12 percent from the previous year to SR1.16 trillion. Saudi Arabia’s total public debt stood at just over 990 billion riyals at the end of 2022.

In the fourth quarter of 2022, actual revenue reached SR317.9 billion, while expenditures stood at SR363.7 billion. The Kingdom posted a deficit of SR45.7 billion in the three-month period.


Oil Updates – prices slip further on US demand, interest rate fears

Oil Updates – prices slip further on US demand, interest rate fears
Updated 6 sec ago
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Oil Updates – prices slip further on US demand, interest rate fears

Oil Updates – prices slip further on US demand, interest rate fears

SINGAPORE: Oil prices on Thursday extended declines from the previous session after a larger-than-expected build in US crude stockpiles stoked worries about slow demand, while signs that US interest rates could remain elevated added to pressure, according to Reuters.

Brent crude futures fell 14 cents, or 0.2 percent, to $83.54 a barrel by 7:20 a.m. Saudi time. US West Texas Intermediate crude futures were down 4 cents, or 0.1 percent, to $78.50 a barrel.

US crude oil stockpiles rose while gasoline and distillate inventories fell last week as refiners ran at below seasonal lows due to planned and unplanned outages, the Energy Information Administration said on Wednesday.

Crude inventories rose for the fifth consecutive week, increasing by 4.2 million barrels to 447.2 million barrels in the week ended Feb. 23, the EIA said, compared with analysts’ expectations in a Reuters poll for a 2.7 million-barrel rise.

“Large stockpiles heightened investors’ worries over a slow economy and reduced oil demand in the US,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

“The anticipation of delayed US rate cuts also weighed on the market sentiment as it could undermine oil demand,” he said.

High borrowing costs typically reduce economic growth and oil demand.

Traders have already dialled back expectations for US interest rate cuts after a slew of strong data, including hot consumer price index and producer price index readings. They expect an easing cycle to kick off in June, compared with the start of 2024 when bets were on March.

Market participants are now waiting for the US personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, for more trading cues.

The index, to be released on Thursday, is expected to show prices ticked up 0.3 percent on a monthly basis in January.

The market also eyed the possible extension of voluntary oil output cuts from OPEC and its allies, known as OPEC+, which has limited price declines for now.

“With the demand outlook remaining uncertain, we think OPEC will extend the current supply agreement to the end of the second quarter,” ANZ analysts Daniel Hynes and Soni Kumari said in a client note.

The price outlook remains unchanged, the analysts added, projecting 2024 annual average prices at $86 a barrel for Brent and $81 a barrel for WTI.

The conflict in the Middle East is also expected to keep a floor under oil prices, Rakuten’s Yoshida said.

Hamas urged Palestinians on Wednesday to march to Jerusalem’s Al-Aqsa Mosque at the start of Ramadan next month, raising the stakes in negotiations for a truce in Gaza, which US President Joe Biden hopes will be in place by then.

But both Israel and Hamas have played down the prospects for a truce and Qatari mediators have said the most contentious issues are still unresolved.


Saudi Arabia’s SMEs grow 3.1% to 1.3m: Monsha’at  

Saudi Arabia’s SMEs grow 3.1% to 1.3m: Monsha’at  
Updated 7 min 37 sec ago
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Saudi Arabia’s SMEs grow 3.1% to 1.3m: Monsha’at  

Saudi Arabia’s SMEs grow 3.1% to 1.3m: Monsha’at  

RIYADH: Saudi Arabia’s small and medium enterprises totaled 1.3 million in the fourth quarter of 2023, marking a 3.1 percent increase from the previous three months, official data showed.

According to the report released by the Small and Medium Enterprises General Authority, also known as Monsha’at, 43.7 percent of Saudi Arabia’s SMEs, totaling 570,000, are based in Riyadh. 

The analysis added that over 3 million people are working in the SME ecosystem in Riyadh, where female workforce participation is witnessing significant growth. 

Monsha’at further pointed out that the Kingdom’s Regional Headquarters Program has also played a crucial role in accelerating the economic growth of the capital. 

The quarterly SME Monitor report emphasized the expansion of small businesses in Diriyah and the advancement of the Public Investment Fund’s masterplan, spearheading the transformation of the area into a global hub for culture, heritage, and tourism. 

“The Kingdom’s bold policymaking and visionary leadership have enabled it to transform its economy, empower society, and diversify away from oil at an unprecedented scale,” Jerry Inzerillo, group CEO of Diriyah Gate Development Authority, told Monsha’at.  

“This remarkable transformation is reinvesting the country’s bountiful resources into smart initiatives, historic giga-projects, and people-centric policies that are helping to boost employment, open new sectors, and empower individuals,” he added.  

The SME body also projected that the ongoing Diriyah Season which began on Jan. 23 is expected to create 178,000 local jobs and attract over a million visitors.  

The report added that Saudi Arabia’s broader economic dynamism helped the Kingdom secure its first World Expo which will be hosted in 2030.  

The authority also said the Kingdom is witnessing significant growth in the gaming and esports sector, with the industry expected to create more than 30,000 jobs in the Kingdom by 2030.  

“With over 23.5 million gaming enthusiasts in the Kingdom, the demographics are ripe to develop an indigenous game publishing ecosystem. In the coming years, the report shows, the industry is expected to create more than 30,000 jobs and contribute an additional $13+ billion to GDP by 2030,” added Monsha’at. 


Tourism Development Fund signs MoU with Dan Company for Saudi Arabia agritourism projects

Tourism Development Fund signs MoU with Dan Company for Saudi Arabia agritourism projects
Updated 29 February 2024
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Tourism Development Fund signs MoU with Dan Company for Saudi Arabia agritourism projects

Tourism Development Fund signs MoU with Dan Company for Saudi Arabia agritourism projects
  • Dan Company specializes in agri, eco, and adventure tourism that offers a mix of daytime hospitality experiences and overnight stays

RIYADH: The Tourism Development Fund has signed a memorandum of understanding with Dan Company, a subsidiary of Saudi Arabia’s sovereign wealth fund Public Investment Fund, to support investments in the Kingdom’s agritourism sector.

Dan Company specializes in agri, eco, and adventure tourism that offers a mix of daytime hospitality experiences and overnight stays.

The agreement was signed by Qusai bin Abdullah Al-Fakhri, CEO of the Tourism Development Fund, and Abdulrahman Abaalkhail, CEO of Dan Company.

“This memorandum reflects our firm commitment to developing and enabling all investments in the tourism sector and creating qualitative investment opportunities for the private sector to support the future of the tourism industry in the Kingdom and enhance its competitiveness, providing unique experiences for our visitors,” Al-Fakhri said in a statement.

“Integrating rural agricultural elements into tourism programs will enrich visitors’ experiences and provide them with a unique opportunity to discover the beauty of nature and its competitive potential and to connect with the local agricultural culture.”

Abaalkhail meanwhile said: “The agreement… aims to contribute to the development of a sustainable local tourism system by providing financing solutions to our partners, farm owners, to enable them to diversify their activities, build prosperous businesses, and enhance the economic and social situation of local communities.”

“It will also provide opportunities for visitors to learn more about traditional and modern agricultural practices, discover amazing outdoor activities, and enhance their connection to the nature of the Kingdom.”


Saudi Arabia makes $38m contribution to global education fund

Saudi Arabia makes $38m contribution to global education fund
Updated 28 February 2024
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Saudi Arabia makes $38m contribution to global education fund

Saudi Arabia makes $38m contribution to global education fund

RIYADH: Investments in the education sector of lower-income countries will receive a boost as Saudi Arabia officially joins the Global Partnership for Education with a $38 million contribution.

Speaking to Arab News on the sidelines of the Human Capability Initiative in Riyadh, Laura Frigenti, the fund’s CEO, outlined that the contribution will be utilized for the body’s mission of transforming the education sector in underdeveloped countries and preparing young generations for the modern job market. 

The Global Partnership for Education is the largest fund exclusively dedicated to improving the education sector’s performance in low-income and middle-income countries.

It was created “about 22 years ago,” the CEO outlined, adding that “between our own funds and the funds that we have leveraged,” the body has invested about $11 billion in education globally. 

She said: “We are operating in about 90 countries, all the low-income and most of the middle-income countries, including countries that are in a very fragile condition. And we provide both technical assistance as well as financing, to help the government really bring back on track the performance of the education sector.”

She added: “I can tell you, that GPE is very, very active in countries that are of strategic interest to the Kingdom of Saudi Arabia. I’m thinking about Yemen and thinking about the countries in the Middle East, Jordan, Lebanon, I’m thinking about Egypt, Sudan, etc.”

Fringeti commended the Saudi government’s emphasis on the sector and its understanding of the integral role that education plays in diversifying the economy. 

She highlighted that the Kingdom is paving the way for its “very young” population that will require the right skills in order to adapt to a fast-changing labor market.

Around the world, including in the Middle East and North Africa region, countries are confronting a mismatch between youth skills and labor market needs that risks leaving millions of youths—particularly young women—underprepared for tomorrow’s jobs, a release by the body said. 

Youth unemployment across Arab states is around 25 percent, while unemployment for young women has reached 40 percent.

With this new partnership, GPE and Saudi Arabia have committed to working hand in hand to increase investment in education as a powerful force to spur growth in the region and beyond, giving children the skills they need to grow and flourish, a release by the body noted.

The CEO further outlined enthusiasm toward the Kingdom “finally” joining the partnership due to the fact that Saudi Arabia serves as an example that can be utilized as a model for nations globally, saying: “This is one of the reasons why I am so excited about Saudi finally, officially joining the partnership, because there is a lot of the experiences that have been made here that can actually be relevant for other countries, and I’m very excited about the fact that the Saudi being part of the partnership will actually be able to tell their story to the world.”

She concluded: “Saudi is a little bit of a unique case in a sense that it is a country that doesn’t lack resources. So this massive investment may not be replicated at the same scale in other parts of the world. But I think the focus, the understanding of the connection and the trajectory that the government has put in place here is definitely something that will be very relevant to many.” 


Saudi defense minister appointed new SAMI chairman after board reshuffle

Saudi defense minister appointed new SAMI chairman after board reshuffle
Updated 28 February 2024
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Saudi defense minister appointed new SAMI chairman after board reshuffle

Saudi defense minister appointed new SAMI chairman after board reshuffle

RIYADH: Defense Minister Prince Khalid bin Salman is the new chairman of Saudi Arabian Military Industries after a reshuffle of its board of directors, according to a statement.

The minister has replaced Ahmed Al-Khateeb in the key position in the defense and security company, which is entirely owned by the Kingdom’s sovereign wealth fund.

SAMI focuses on advancing and reinforcing Saudi Arabia's defense sector, and plays a crucial role in driving the localization of 50 percent of the Kingdom’s expenditures in this economic sphere – a pivotal objective of Saudi Vision 2030. ‎

Minister of Industry and Mineral Resources Bandar bin Ibrahim Alkhorayef is also on the board, as is Chairman of the General Authority for Civil Aviation Abdulaziz bin Abdullah Al-Duailej, and Assistant Minister of Defense Talal bin Abdullah Al-Otaibi.

Membership also includes Khaled bin Hussain Al-Biyari, Yasser bin Abdullah Al-Salman, and Omar bin Hamad Al-Madi, as well as Abdulaziz bin Abdullah Al-Suqair.

Representing SAMI, CEO Walid bin Abdulmajeed Abu Khalid extended gratitude to the prior board of directors for their tenure, which played a pivotal role in positioning the company among the elite ranks of the top 100 specialized defense firms worldwide.

Established in 2017, the company operates across aviation, aerospace, land systems, maritime, and defense systems, in addition to advanced electronics. 

The company is ranked 79th among the top 100 specialized defense firms globally, and is aiming to reach the top 25 by 2030.

Early this month, SAMI signed a memorandum of understanding with South Korean automobile manufacturer Kia Corp. at the World Defense Show 2024 in Riyadh with the aim to boost cooperation in the local production of military vehicles, thereby strengthening Saudi Arabia’s defense and security sector.