KSA Economy News & Discussions

[al-Hasani]

Vibrant Saudi economy ‘must set higher targets'

RIYADH: MD RASOOLDEEN

Published — Monday 20 January 2014

Last update 20 January 2014 1:58 am

Economy and Planning Minister Mohammed Al-Jasser says the Kingdom should not be complacent with what the nation has achieved in the past, and the people and the private sector should forge ahead to achieve higher targets in the field of economic development.
Addressing more than 1,000 delegates at the Seventh Global Competitiveness Forum in Riyadh, the minister said the Kingdom had diversified its economy into several viable areas in keeping with global trends.
Non-oil exports have grown from SR32 billion in 2001 to SR200 billion in 2013, he pointed out.
The projects initiated lately have created plenty of jobs in the market. Young citizens are being given attractive incentives to achieve their aims in education, the minister said, adding that there are 185,000 Saudi students pursuing studies in various universities and colleges throughout the world.
There are some 8 million foreign workers in the Kingdom and the government undertook a massive clean-up program to regularize the status of illegal residents in the Kingdom.
“We are thankful to expatriate workers who have contributed a great deal toward the economic development of the country,” he said.
“We have made all efforts to be more transparent in all activities, which would help build understanding and confidence among the global community,” the minister added.
A detailed quarterly report on the Kingdom’s Gross Domestic Product was released recently, he said.
Al-Jasser, quoting Health Minister Dr. Abdullah Al-Rabeeah, said the life expectancy rate had gone up to 75 years because of the excellent medical facilities and services provided by the state.

“Our demographics are favorable. We have one of the world’s youngest populations with 61 percent of our people within the working age and 35 percent under 15 years old,” Al-Jasser added.
Hans-Paul Burkner, chairman of the Boston Consulting Group; Philip Yeo, chairman of Standards Productivity and Innovation for Growth (SPRING); Deborah Wince-Smith, president and CEO of the Council on Competitiveness; and Professor Dong-Sung Cho, professor at Seoul National University and member of the Presidential Council for National Competitiveness of Korea, were also present at the panel discussion.
Burkner said enormous efforts were being made in the Kingdom to promote economic prosperity.
The young generation should be made to understand the progressive steps of the government and they should be encouraged to involve themselves in the path to economic progress, he said.
In his opening address on Sunday, SAGIA Gov. Abdul Lateef Al-Othman said the Kingdom had undertaken many initiatives toward enhancing its business and investment environment.
“In 2000, a new foreign investment law was announced and later enacted. In 2005, Saudi Arabia joined the World Trade Organization and began large-scale efforts toward reforms and development of the legal and commercial systems,” Al-Othman added.
Lucrative incentives are available for investors, such as long-term low-cost lending as well as a highly competitive tax system, he said.
Al-Othman said the Saudi Industrial Development Fund (SIDF) provides low-cost medium and long-term capital for industrial projects for as much as 50 percent of a project’s cost and up to $133 million.
Additionally, export credit, financing, guarantees and insurance are also available through the Saudi export program. Saudi Arabia’s tax system is business-friendly, he said.
The World Bank’s Doing Business Report ranks Saudi Arabia as having the 3rd most favorable tax environment in the world.
“The Kingdom has no income tax, no property tax, no sales tax, and no value-added tax. Corporate tax is only 20 percent, with the ability to carry losses forward indefinitely to offset future taxes,” he said, adding that there no constraints on the repatriation of capital and no minimum capital requirements for foreign investors in most sectors,” Al-Othman said.
“Today Saudi Arabia’s economy remains one of the largest in the world. At $727 billion, our GDP ranks 19th in the world, having tripled during the past 10 years. According to the IMF, Saudi Arabia is the third fastest growing economy among G20 states after China and India, and the largest economy in the Middle East and Northern Africa, accounting for more than one half of the Gulf Cooperation Council’s economic output,” Al-Othman added.
Speaking about diversification of the economy, Al-Othman said: “Our partnering is now extending beyond hydrocarbons to encompass the whole spectrum of business activity spanning from health care, education, training, ICT and transportation.

“We aim to target our incentives, land allocation, and services toward businesses in a way that is commensurate with their contribution to the economy,” he said.
First is building on our natural advantage by growing downstream petrochemical manufacturing and technology, Al-Othman said.
The downstream industrial, oil and gas services sectors will continue to be of prime importance, he added.
“We will be working closely with the Ministry of Petroleum and Mineral Resources, Saudi Aramco, Saudi Basic Industries Corporation (SABIC) and the National Industrial Clusters Development Program to continue to support these mainstays of our economy. We will support the effort that Saudi Arabia is making to become a technology hub for water desalination,” Al-Othman said.
There is also an opportunity to develop and grow the industrial spare parts sector for major national companies. “Some work has been done in this area and we plan on accelerating this vital opportunity,” he added.
He said the Kingdom would collectively develop a specific investment opportunity list for each target sector such as oil and gas and mining, manufacturing water and electricity, health, transportation, tourism and ICT.

Vibrant Saudi economy ‘must set higher targets’ | Arab News — Saudi Arabia News, Middle East News, Opinion, Economy and more.



@Arabian Legend @JUBA @Yzd Khalifa @BLACKEAGLE @Awadd @Full Moon @Bubblegum Crisis etc.

 

[al-Hasani]

Assaf upbeat on growth

JEDDAH: ARAB NEWS

Published — Thursday 23 January 2014

Last update 24 January 2014 2:02 am

Saudi Arabia is poised to achieve a better economic growth rate in 2014 compared to 2013, Finance Minister Ibrahim Al-Assaf said on Thursday.
“We expect a healthy economic performance in 2014 and it will be better than that of last year,” he said.
Speaking to Al-Arabiya news channel on the sidelines of World Economic Forum in Davos, he said the private sector’s contribution to the gross domestic product in 2014 would reach 60 percent.
Al-Assaf, who led the Saudi delegation to the forum, gave a brighter outlook of the global economy, despite the obstacles facing some countries. “The US economy is improving while the European economy is moving forth like that of Japan and China.”
Asked about government spending and investment, Al-Assaf said it would focus on infrastructure projects.
The state-owned Public Investment Fund, he said, has invested in a number of companies. “Most of them are holding companies and its shares will be sold to citizens when they are ready for IPOs.” He said the government was focusing on local investment.
Abdullatif Al-Othman, governor of Saudi Arabian General Investment Authority, who was also present in Davos, said foreign investors in the Kingdom should create added-value jobs and ensure transfer of technology.
“If they fail to fulfill these conditions within a grace period of 18 months, their licenses will be canceled,” he said, highlighting the Kingdom’s investment-friendly climate and incentives given to investors.

Assaf upbeat on growth | Arab News — Saudi Arabia News, Middle East News, Opinion, Economy and more.

 

[Arabian Legend]

^^ We need money you Assaf open up the safe box.

I hate that man

 

[al-Hasani]

Elderly businessman casts vote at JCCI elections

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  BREAKING THE AGE BARRIER: Salem Al-Otaibi, an elderly businessman who owns a trading company, visited Jeddah Events and Exhibition Center to cast his vote at JCCI elections on Wednesday. (AN photo)
  
  JEDDAH: FOUZIA KHAN
  
  Published — Thursday 9 January 2014
  
  Last update 9 January 2014 2:48 am
  
  
  
  Elderly businessman casts vote at JCCI elections | Arab News — Saudi Arabia News, Middle East News, Opinion, Economy and more.
  
  @Arabian Legend @Awadd @Bubblegum Crisis @JUBA @Yzd Khalifa
  
  Is it not beautiful to have senior businessmen like Salem al-Otaibi to inspire the youth and people of his age? I know that most of us prefer not to work in the private sector but if one looks at it historically then Arabs are one of the best skilled businessmen. Wherever the nearly 500 million Arabs are in the world, often far away from the Arab world, they open up successful businesses. Look at the Forbes "world's richest list". Many Arabs in the top including the world richest man - Carlos Slim Helú. Whether it is the Americas, South East Asia, Sub-Saharan Africa, South Asia, Central Asia or Europe.
  
  My point is that we should encourage more entrepreneurship and a bigger private sector. This is what is really the economic backbone of a country if you look outside of our region.
  
  I have only immense respect for respected elders like Salem al-Otaibi and I hope more of his like will come and especially young people. They must be active on all fields this is the only way our dear country will grow.

@Arabian Legend



More Salem al-Otaibis and less Ibrahim al-Assafs.

 

[Arabian Legend]

@Arabian Legend



More Salem al-Otaibis and less Ibrahim al-Assafs.

I don't care, more money.

 

[Awadd]

@Arabian Legend



More Salem al-Otaibis and less Ibrahim al-Assafs.

خدها مني العجايز دولا حيتوكلوا

الأثرياء الجدد في السعودية حيكونوا السعوديين الرأسماليين الصناعيين والتقنيين والخدماتيين ...مع تحرر الاقتصاد أكثر لا يمكن لهؤلاء أن يحافظوا على تفوقهم.

game on

 

[al-Hasani]

Kingdom prioritizes shift to knowledge-based economy

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SEAT OF LEARNING: Princess Nora bint Abdulrahman University was established in May 2011 to boost higher education for women.

RIYADH: RASHID HASSAN

Published — Wednesday 29 January 2014

Last update 29 January 2014 1:20 pm


A report recently released by the Oxford Business group has indicated that the education budget accounted for the second largest expenditure for the Saudi government, accounting for more than a quarter of overall spending in 2012.
The report, entitled “Saudi Arabia 2013”, maintained that the Kingdom has the largest education market in the region, taking into consideration its population size and per capita expenditure on human resources in the Gulf Co-operation Council (GCC).
Annual expenditures increased substantially from SR150 billion in 2011 to SR169 billion the following year, with a further rise to SR204 billion for 2013, the report highlighted.
Complementing these monetary commitments are a host of monitoring, evaluation, reform and other improvement programs implemented over the years to boost the capabilities and expectations of the nation’s graduates.
The report underlined that key to delivering on the agenda are the abilities of its population and the knowledge of its future leaders to successfully navigate from a resource based, export oriented economy to a more diversified one with the value addition.
It further asserted that as the demand for quality education is growing, the government has, so far, dedicated substantial resources to the sector.
The study further indicated that the trend is consistent with the country’s long-term economic development plans, which place an emphasis on high-tech industries.
The report highlighted that the Kingdom is financially motivated in striving to diversify its economy beyond the extraction of oil and gas to become a knowledge based society.
The government also established Princess Nora bint Abdulrahman University, the largest women-only university in May 2011 to boost higher education for females. The university is composed of 32 campuses across Riyadh and a new library capable of holding 4.5 million volumes.

Kingdom prioritizes shift to knowledge-based economy | Arab News — Saudi Arabia News, Middle East News, Opinion, Economy and more.​

 

[al-Hasani]

Saudi non-oil sector growth to remain strong in medium term​

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JEDDAH – Economic growth in Saudi Arabia slowed in 2013 on the back of a small contraction in oil GDP and a moderation in non-oil sector growth, said NBK in its latest Economic Update.

“Recent labor market disruptions are believed to have impacted activity in the latter. Over the medium-term, growth should remain relatively solid, supported by high oil prices and implementation of large government projects. Nevertheless, an easing in private sector activity and a moderation in the pace of overall government spending – as well as heavy downward revisions to official data – have seen us lower our growth forecasts; we now expect non-oil growth of 4-5 percent in both 2014 and 2015, compared to up to six percent before,” said NBK report.

“Recent data point to softening in the pace of non-oil private sector activity. The Purchasing Managers’ Index trended lower through 2013, credit growth has eased slightly (though remains strong), and ATM and point-of-sale figures are off their highs. This may be partly linked to recent labor market initiatives and Saudization efforts which have led to a crackdown on illegal foreign workers. The full impact of these policies on private sector activity has yet to manifest, but there are downside risks in the near-term: increased labor costs, disruptions to labor-intensive sectors (especially construction and retail), and weaker domestic consumption levels. Government infrastructure projects and rapid population growth should nevertheless continue to provide underlying support for steady growth in non-oil GDP.

“Saudi Arabian oil production rebounded by more than 1 mbpd in the nine months to September 2013 to a peak of 10.2 mbpd, partly to compensate for output disruptions in Libya and Iraq. Since then, output has once again fallen back. As demand weakens and non-OPEC supply continues to rise, Saudi Arabia – given its unofficial role as OPEC’s swing producer – is seen making more significant cuts in 1H 2014 in order to keep prices close to $100 pb. We expect real oil GDP to fall in 2014 by some two percent, before stabilizing in 2015.

“Inflation edged higher in 2013, averaging 3.6 percent in the first 10 months. This was driven by higher inflation in the food and housing segments, both of which have eased of late. While food price inflation is expected to remain contained, pressures from residential rents could rise amid a shortage in affordable housing – a challenge that the government is trying to address through a house building program and new mortgage law. However, steady economic growth and softer food prices should keep inflation at a moderate rate of around 3-4 percent over the forecast period.

“The budget registered a lower, but still large, surplus of seven percent of GDP in 2013. As oil prices slip further and revenues decline, the surplus is projected to continue to shrink to around 6-7 percent of GDP in 2014 and 2015 – despite moderating expenditure growth. Further fiscal consolidation could conceivably affect capital spending allocations. Nevertheless, a large number of infrastructure projects – including major transportation and power projects – will be financed off-budget, thereby mitigating the impact of any curb in spending. Private sector credit growth eases, but remains strong; stock market hits post-financial crisis peak.

“Some financial indicators have shown a slight softening in market conditions: both credit and monetary growth have slowed from their peaks. But overall, the Saudi financial sector still looks in robust shape: banks are profitable and well-capitalized, lending growth is still strong and the stock market staged a significant rally in 2013. Solid economic growth and implementation of large government projects should provide continued support for the financial sector in 2014. Downside risks stem from a prolonging of the recent softening in private sector activity and possible instability in global markets.

“Growth in liquidity has eased somewhat in recent months. Annual growth in the broad money supply (M3) decelerated from a two-year high of 16 percent in May 2013 to 10 percent in October. Growth in the short-term measure M1 also slowed from 19 percent in mid-2013 to an 11-month low of 15 percent, as a result of weaker growth in demand deposits – which make up more than 60 percent of total banking system deposits. “Growth in private credit eased back slightly in 2H 2013, though is still very firm. Lending growth edged down from its four-year high of 17 percent in May 2013 to 13 percent in October. The latest softening could be partly explained by the recent slowdown in private sector activity. But the slowdown may also be reducing credit growth to healthier, more sustainable levels.

“While corporate loans have traditionally accounted for the bulk of lending, banks have increasingly focused their attention on the smaller retail lending segment. The latter has offered higher margins in a low interest-rate environment. In 2Q13, consumer loans grew by some 22 percent y/y compared with 13 percent for corporate loans. The new mortgage law should also help lift demand for home loans, although its impact will likely be gradual. – SG

Saudi Gazette - Saudi non-oil sector growth to remain strong in medium term

 

[al-Hasani]

Value of awarded contracts in KSA climbs to all-time high of SR293.4b

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Last updated: Monday, February 17, 2014 12:05 AM

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JEDDAH – The Saudi construction sector continues to benefit from extraordinary spending on a massive scale as the government continues its push toward meeting rapidly growing demand for services by its citizens while diversifying the economy away from the oil sector, the National Commercial Bank said Sunday in its “Construction Contracts Index Fourth Quarter 2013”.

This long-term challenge has necessitated heavy expenditures across all sectors of the economy, it added. The total value of awarded contracts of SR293.4 billion clearly indicates that the government has and will continue the trend of placing significant injections into its capital expenditures.

As mentioned by the Ministry of Finance in its 2014 budget release, significant expenditures are planned for the education & manpower sectors (SR210b), health & social affairs (SR108b), municipality services SR39b), transportation & infrastructure (SR66b) and water, agriculture & manufacturing (SR61b). While we project the government’s capital expenditures to decrease from SR278 billion in 2013 to SR238 billion in 2014, the value of awarded contracts will continue in line with the activity that has been witnessed over the last few years.

The value of awarded contracts moderated during the fourth quarter to SR41.7 billion following an exceptional third quarter. The year 2013 concluded at SR293.4 billion, mark-ing an all-time high in terms of awarded contracts by value. Furthermore, 2013 surpassed 2012’s performance by 25 percent and also eclipsed the previous high of SR270.3 billion during 2011 by 9 percent. Anchor sectors were responsible for a majority of the awards as the transportation (SR92b), power (SR48b), industrial (SR19b) and petrochemicals (SR18b) garnered significant contributions. Alternatively, the real estate sector (SR40b) played a prominent role as numerous contracts focusing on residential and mixed-use development were heavily targeted. As for Q4’13, the industrial and power sectors captured 71 percent of the value of awarded contracts.

The SR293.4 billion in awarded contracts during 2013 was largely attributed to the government’s continued expansion of capital expenditures. Consequently, the value of awarded contracts in 2013 recorded a remarkable 25 percent hike compared to 2012. The majority of the value of awarded contracts occurred during H2’13, accounting for 65 percent of awards. The water, education, healthcare and roads sectors witnessed sizeable spending by the government in the amount of SR45.7 billion as part of the targeted expenditures it has outlined in recent years. The private sector played a larger role in the development of projects. According to the Ministry of Finance’s budget release statement, approximately 2,330 contracts worth SR157 billion were awarded by the government to the private sector.

The Construction Contracts Index (CCI) ended the year at 465.03 points in December after a volatile year, which saw the index dip down to 225.68 points in May all the way up to 494.09 in September. The CCI was relatively stable during Q4’13 as it reached 465.34 points in October followed by 470.25 points in November. The magnitude of spending in the construction sector has allowed the CCI to float above the 200 point mark for 32 consecutive months, dating back to May 2011.

The Northern Borders attracted 37 percent of awarded contracts by region, garnering the largest share. This was mainly due to numerous mega-projects being awarded for the development of the Waad Al Shamal Mining City by the Maaden/ mosaic/Sabic joint venture. The Makkah region captured 25 percent of the awarded projects as the power sector played a leading role. The Eastern Province secured 9 percent of the awarded projects as a majority of the contracts were in the industrial, petrochemical and oil & gas sectors. The Riyadh region was relatively quiet with only 6 percent in awarded con-tracts,

The value of awarded contracts in the transportation sector reached SR91.9 billion in 2013. Arriyadh Development Author-ity awarded the majority of the value of these contracts, while the General Authority for Civil Aviation (GACA) also contributed.

The transportation sector’s value of awarded contracts dramatically grew in 2013. Arriyadh Development Authority’s awarding of the Riyadh Metro Project contributed to the spike for this year. Railways controlled the majority of the type of projects that were awarded followed by aviation. The majority of contract awards were given to consortiums and JV’s given the sheer size of those projects.

The value of awarded contracts in the power sector reached SR48.5 billion in 2013. As expected, Saudi Electricity Company (SEC) awarded the majority of the value of these contracts, while Saudi Aramco made a sizeable contribution of SR6.1 billion.

SEC has steadily increased the aggregate value of its contracts over the last few years, with 2013 being the largest. Al-though a number of contracts were awarded by other entities, SEC has traditionally been the sole owner of contract awards, as the majority owned government company is responsible for increasing the capacity, distribution and transmission of electricity throughout the Kingdom. Aramco awarded four contracts in the power sector aimed at providing the necessary infrastructure for its own projects in Jizan and the Eastern Province.

The value of awarded contracts in the industrial sector rebounded to reach SR22.3 billion in 2013. The Maaden/Mosaic/Sabic JV awarded the highest aggregate value of contracts as part of the Waad Al Shamal Mining City. Numerous other project owners were involved in areas such as cement, gold and construction of new industrial cities.

The majority of the contracts in the industrial sector were awarded to Asian and European contractors. Chinese and South Korean had the most awards as new comers were able to enter the market as a result of numerous mega-projects being awarded. Hanwha was the largest recipient of contract awards by value.

The value of awarded contracts in the residential real estate sector reached SR20.8 billion in 2013. As part of the government’s national housing strategy, the Ministry of Housing (MOH) awarded the majority of housing contracts. Within the private sector, Emaar dominated the value of awarded contracts as part of its expansion plans in the Makkah region.

The numerous contracts that were awarded by the MOH has largely benefitted local contractors. Local contractors will continue to benefit from the housing expansion strategy throughout the medium to long-term. However, international contractors have been the main recipients of residential projects that were awarded by the private sector as evidenced by large con-tracts being awarded to Azmeel Contracting & Construction Company and Drake & Scull.

The value of awarded contracts in the mixed-use real estate sector reached SR19.2 billion in 2013. The Ministry of Finance’s mega-project award for the Abraj Kudai development in Makkah captured the largest share by value. A majority of the projects took place in the Makkah region.

The multi-use real estate sector had a low amount of contracts but were valued fairly high. Saudi Binladen was the largest award recipient as part of the Abraj Kudai project. Azmeel also won a significant contract as part of the Riyadh Information Technology & Communication Complex mixed-use project. – SG

Value of awarded contracts in KSA climbs to all-time high of SR293.4b | Economy | Saudi Gazette

Kingdom inflation falls to 2.9 percent​

Last updated: Monday, February 17, 2014 12:05 AM

JEDDAH – According to data by Saudi Arabia’s Central Department of Statistics, the Kingdom’s annual inflation eased marginally to 2.9 percent in January, the lowest level since April 2007, from 3 percent in the previous month.

Prices of food and beverages rose 5 percent year-on-year in January, but dipped 0.1 percent from the previous month, while housing and utility costs climbed 3.7 percent on an annual basis and 0.4 percent month-on-month, the figures showed. — Reuters

Kingdom inflation falls to 2.9 percent | Economy | Saudi Gazette

 

[al-Hasani]

Saudi Arabian PPPP (plastics, petrochemical, printing, and packaging) 2014 sets in motion


Deputy Minister for Internal Trade Abdullah Bin Ali Al Aqeel cut the ceremonial ribbon during the opening of the Saudi Plast & Petrochem 2014 and Saudi Print & Pack 2014 in Riyadh.​

Last updated: Monday, February 17, 2014 9:38 PM

RIYADH – Under the patronage of the Minister of Commerce and Industry Dr. Tawfig Fawzan Al-Rabiah, the Deputy Minister for Internal Trade Abdullah Bin Ali Al Aqeel, inaugurated Monday the Saudi Plast & Petrochem 2014 and Saudi Print & Pack 2014 (Saudi PPPP 2014), the largest plastics, petrochemical, printing, and packaging trade fairs in the Middle East, in the presence of a huge assembly of delegates and industry professionals.

Running until Feb. 20 at the Riyadh International Convention and Exhibition Center, the event hosts over 520 local and international exhibitors from 27 countries.

Saudi Plastics & Petrochem - the 11th International Plastics and Petrochem Exhibition and Plast & Pack – the 11th International Printing and Packaging Technologies gathers top industry engineers, industrialists, entrepreneurs and businessmen to experience the latest technologies, top products and services, machinery, equipment, and supplies in the petrochemical, plastics, printing, and packaging industries on over 20,000 square meters of exhibition space.

Saudi Basic Industries Corporation (SABIC), a Diamond sponsor of the event, has a strong presence at the event with a pavilion in which the company is showcasing its latest applications and technical solutions reflecting its new innovative products that cater to the building & construction and packaging sectors. It is showcasing its portfolio of polymers, elastomers, and specialty products which offer technical solutions to its customers in the transportation and automotive industry, besides its innovative applications catering to the healthcare and consumer products sector. These products, besides other exhibits at the show, constitute a step towards a more sustainable future.

SABIC will organize for its customers a number of lectures to be delivered by a specialized team from SABIC and representatives of the leading companies developing plastics production machines, to update the customers on the latest advancements in this industry.

Saudi Plastics & Petrochem 2014 will showcase a variety of raw materials, basic chemicals and compounds, plastic injection molding systems, shaping and forming applications, medical-use products and plastic pipes, in addition to manufacturing and processing equipment, chemical engineering software, petrochemical plant machinery, safety, security and environment-friendly equipment, maintenance and processing systems, and control and lab tools and equipment.

Saudi Print & Pack 2014 offers an overview on a wide array of offerings, including prepress equipment, stitching machines, buffing machines, folding and cutting machines, prepress software, digital direct printing techniques, silkscreen printing techniques, audit equipment, paper and printing supplies, in addition to filling machines, packaging machinery, consumer goods canning and packaging, design and manufacturing services, packaging equipment, paper production equipment, food packaging equipment, and packaging material.

Saudi Polymers is the trade fair’s platinum sponsor, while Tasnee is also a diamond sponsor and Saudi Printing and Packaging Company is the Silver Sponsor. – SG

Saudi PPPP 2014 sets in motion | Economy | Saudi Gazette

 

[al-Hasani]

Saudi Arabian non-oil sector key driver of growth in 2014
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Last updated: Monday, February 17, 2014 9:37 PM

JEDDAH – The Saudi non-oil sector is expected to continue growing strongly this year reflecting government-led infrastructure projects, such as the Riyadh metro and a high speed inter-city rail network currently under construction, QNB Group report forecast. The sector is expected to be the key driver of growth in 2014, boosted by large public sector infrastructure investment and the rapidly growing population.

Based on a conservative oil price assumption of $80/b, government revenues and expenditures are expected to be $228 billion in 2014.

Overall, the near-term KSA macroeconomic outlook is positive with a small recovery in oil production lifting real GDP growth to 4.4 percent in 2014.

Leading indicators such as point of sales transactions and the Purchasing Managers Index suggest that the private non-oil sector is continuing to grow strongly, and large projects in transportation infrastructure and the mining sector should help underpin a pick-up in private sector growth this year. Indeed, the latest PMI reading for the month of December (58.7 versus 57.1 in November, whereby a reading above 50 indicates expansion) signaled a sharp rise in activity and new orders of non-oil producing firms, with the pace of expansion at an eight month high.

Going forward, there is a small downside risk of lower global oil demand on slow economic growth, particularly as tapering of Quantitative Easing affects growth in emerging markets. Having said that, KSA fiscal buffers are large and the authorities have space to smoothen spending over the medium term in the event of a significant oil price drop.

The sector grew by a robust 5.0 percent year-on-year in 2013 as consecutive years of elevated government spending lifted business and consumer confidence and banks’ comfort in lending. In terms of sectors, the budget announcement indicated that the fastest growing sectors in 2013 were the construction (8.1 percent), the transport and communication (7.2 percent), as well as the retail sector (6.1 percent).

Furthermore, the authorities are investing $86 billion in building the new King Abdullah Economic City in an attempt to diversify the economy away from hydrocarbons into a knowledge-based economy. On the whole, the value of projects planned or underway was up over a third in 2013 compared with 2012, according to MEED projects data. Spending by government-owned firms seems set to continue at a robust rate and will continue to offer plenty of opportunities for local contractors. In particular, Saudi Aramco has major projects underway in the refining and petrochemical sectors, which will extend the economy’s industrial base further.

What’s more, the budget announcement stated that the government will continue to allocate funds via specialized credit institutions with $22.8 billion being disbursed this year in order to finance industrial projects and thus to support and boost non-oil development. A case in point is the Saudi Industrial Development Fund (SIDF) which has recently approved 19 loans valued at $747m for 15 new industrial projects and the expansion of four existing projects. — SG

Saudi non-oil sector key driver of growth in 2014 | Economy | Saudi Gazette

 

[al-Hasani]

Saudi Arabian nonoil exports up 9.2% to SR19.9bn

China ranked first for countries mostly receiving Saudi nonoil exports in December.
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RIYADH: ARAB NEWS

Published — Saturday 15 February 2014

Last update 15 February 2014 12:03 am

Saudi nonoil exports rose by 9.2 percent to reach SR19.93 billion in December 2013 compared to the figures of the same period last year, according to a report released by the Central Department of Statistics and Information (CDSI).
The CDSI report stated that imports dropped by 6.5 percent to SR49.15 billion in the comparable periods.
Exports of chemical products ranked first capturing 32.33 percent of total nonoil exports at the value of SR6.44 billion, followed by plastic products (32.33 percent) at SR6.44 billion and transport equipment (12.80 percent ), the report said.
Machines and electric equipment topped highest value of Saudi imports during December at SR12.64 billion, capturing 25.72 percent of total imports, followed by transport equipment at SR9.51 billion (19.35 percent), minerals and their products at SR5.59 billion (11.37 percent), according to the report.
In December, China ranked first for countries mostly receiving Saudi nonoil exports by 15.57 percent of total exports, followed by the UAE and Singapore by 12.56 percent and 6.88 percent, respectively, the report said.
As regards Saudi imports, the United States ranked first among countries exporting goods to the Kingdom in December at 13.84 percent of total imports, followed by China and Germany at 12.72 percent and 6.74 percent, respectively, according to the report.

Saudi nonoil exports up 9.2% to SR19.9bn | Arab News — Saudi Arabia News, Middle East News, Opinion, Economy and more.​

 

[al-Hasani]

Saudi Arabian construction sector to grow at 5.54% to 2017
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JEDDAH – The Saudi Arabian construction industry registered a compound annual growth rate (CAGR) of 6.94 percent during the review period (2008-2012), MarketResearch report on “Construction in Saudi Arabia – Key Trends and Opportunities to 2017” said.

Industry expansion was supported by the government’s initiatives to transform the country from an oil-based economy to one more reliant on manufacturing and services. This resulted in significant investments in infrastructure development, which positively affected other markets in the industry. Population growth and a rise in disposable income also increased the demand for residential, commercial and institutional buildings. The industry is expected to record a forecast-period (2012-2017) CAGR of 5.54 percent, driven by an increase in government expenditure on infrastructure construction.

Meanwhile, global oil prices traded mixed Wednesday before the latest US crude stockpiles data for clues about demand in the world’s biggest economy at the tail-end of a harsh winter.

New York’s main contract, West Texas Intermediate (WTI) for delivery in April, gained 26 cents to $102.09 per barrel.

Brent North Sea crude for April slid 20 cents to $109.31 in midday London deals.

Lennox added that demand for “finished petroleum products” such as heating oil – which has seen increased consumption during winter – would likely taper as spring approaches. – SG/AFP

Saudi construction sector to grow at 5.54% to 2017 | Economy | Saudi Gazette

 

[al-Hasani]

GCC growth outlook promising


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Last updated: Thursday, February 27, 2014 12:56 AM

JEDDAH – The Gulf countries have a promising growth outlook underpinned by budget surpluses resulting from high oil prices, Credit Agricole Private Banking said in its latest report titled “Macro Comment – Eastern Promises: Mena Update”.

“2013 proved to be an encouraging year for a number of countries in the MENA region. The hydrocarbon-based GCC economies displayed rates of GDP increases high enough to define these countries as a pocket of above average growth. On the other hand, some improvements were spotted in countries where the activity had been deeply disturbed by the Arab Spring-like uprising”, said Dr. Paul Wetterwald, chief economist, Crédit Agricole Private Banking.

“With respect to the oil rich GCC countries, one has to recall that after the growth revival ignited by the oil price increase of 2010-2011, public spending added to the growth momentum. This government support has to rely on firm oil prices if one does not want to endanger the fiscal and/or external equilibriums,” he said.

IMF said earlier that Bahrain, Iran, Algeria and Iraq will not arrive at fiscal surpluses if the oil price remains at the current level, while, Kuwait, Saudi Arabia, and the UAE are on the safe side.

The growth dynamic experienced by Kuwait, Saudi Arabia and the UAE is still vivid as shown by the January Purchasing Managers Indices (PMI). In Saudi Arabia the headline PMI rose to 59.7 (from 58.7 in December), and in the UAE index remained comfortably above the 50 no-change mark despite its slightly weaker reading (57.1 vs. 57.4 in December).

“There is a link between growth and inflation, but the answer is not yet affirmative whether countries with the highest growth are the most prone to inflation. Despite the difficulties and uncertainty surrounding the data collection, one can obtain a rough country ranking according to the inflation rate, from the highest to the lowest. Iran tops the inflation league, followed by Egypt, Yemen, Turkey, Syria, Bahrain, Libya, Lebanon, Jordan, Saudi Arabia, Kuwait, Qatar, Iraq, Morocco, UAE, Oman, and finally Algeria. This suggests that inflation tends to go hand in hand with social instability. One is tempted to assume that consumer prices increases ignite protests and uprising, generating a vicious circle where logistic issues stemming from large scale protests add to inflation,” said Wetterwald.

In Saudi Arabia, companies stressed that competitive conditions weighed on pricing power, whereas input prices increased notably during January. Purchasing costs added more to overall inflation than salaries did.

In the UAE, indications derived from the purchasing managers index signals cost increase in January. Purchase price inflation gained pace as raw materials prices rose, but wage inflation eased.

Wetterwald noted: “Investors should retain that the positive growth momentum in the GCC countries set the stage for improving credit metrics as far as bonds/sukuk issuers in hard currencies (US dollar, Euro) are concerned.” — SG

GCC growth outlook promising | Economy | Saudi Gazette

 

[Awadd]

sorry I'm busy in these days.
WHY would anyone banned al-hasani? He always tried to keep the peace.