Non-oil sectors driving Saudi growth

16 September 2014

About 37 per cent of projects under execution are in the transport sector

Saudi Arabia’s growth is expected to come almost exclusively from the non-oil sectors in 2014 and 2015 as Riyadh ramps up spending across several fronts.

Speaking at the MEED Saudi Mega Transport and Infrastructure Conference in Riyadh on 16 September, Said al-Shaikh group chief economist and senior vice president of the local National Commercial Bank (NCB), said that non-oil growth will continue to drive the Saudi economy.

NCB forecast GDP growth for Saudi Arabia to be 4.3 per cent in 2014 and 3.8 per cent in 2015.

“Growth is now being driven by projects in the non-oil sectors such as transport and infrastructure, power and water as well as communications and construction,” Al-Shaikh said.

The official also said that SR232.3bn ($62bn) worth of non-oil projects were awarded in 2013 and SR76.58bn ($20.4bn) expected to be awarded in 2014.

Around 37 per cent of upcoming projects under execution belong to the transport sector with 21 per cent in power and 19 per cent in the education sectors respectively.

The official said that many of these schemes were essential to secure the future of young Saudis. About 57 per cent of Saudi Arabians are aged under 30.

“Investment [in the kingdom] is very positive and while lower oil prices may need to be managed in the future there is no reason why this cannot continue.”

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