The 28 February 2018 sees the launch of Saudi Arabia 2018: New Opportunities in the Middle East’s biggest market, the latest premium intelligence report from the MEED Insight team.
[caption id="attachment_294873" align="aligncenter" width="212"] Saudi Arabia 2018: New opportunities in the region's biggest market. Click here for more details[/caption]
The report provides a comprehensive analysis of the region’s biggest and most important market.
Its publication aims to help you understand the significance to your business of the huge economic and social transformations taking place in Saudi Arabia.
At more than 240 pages, the report provides a detailed assessment of the prospects for the giant Saudi Arabian economy and offers an expert assessment of the outlook for the kingdom’s projects market.
Outlook for Saudi projects
With in excess of $1.4 trillion-worth of major projects planned or under way, Saudi Arabia is the biggest projects market in the region.
Nearly double the size of the region’s next-biggest projects market, the UAE, Saudi Arabia is home to almost half of all projects planned in the GCC.
Saudi Arabia 2018: New Opportunities in the Middle East’s biggest market examines the opportunities and challenges in the kingdom's projects sector, covering all of the core sectors of the Saudi economy, including oil and gas, petrochemicals, construction, power, water, rail, aviation and manufacturing.
Click here to find out how you can order your copy now and receive a $500 discount as part of our pre-launch special offer.
Saudi Arabia is, without question, the most important market in the Middle East and North Africa.
The kingdom's rapidly growing population of more than 32 million people accounts for about 65 per cent of the GCC population and is driving surging demand for all kinds of goods and services, ranging from consumer products to electricity, healthcare services and infrastructure.
As the region’s biggest economy, the world’s biggest oil producer and home to the most important sites in Islam, Saudi Arabia dominates the regional economic, political and cultural landscape.
It is also a significant actor on the international stage.
Anyone who is serious about doing business with the Middle East must make time to understand and connect with Saudi Arabia.
And now is the right time to do so.
Neom future city
The high-profile launch in November 2017 of the spectacular $500bn Neom future city project by Crown Prince Mohammed bin Salman marked the start of a new era for the Saudi Arabian economy.
After three extremely challenging years as Riyadh sought to get its finances in order following the 2014-16 crash in oil prices, Neom signals the return to a more positive outlook.
One that promises wonderful investment and business opportunities across all sectors.
But the new era also introduces significant changes to the Saudi market.
The region’s first so-called ‘gigaproject’ is one of the flagship initiatives of Saudi Arabia’s ambitious Vision 2030 economic transformation programme, which was launched in April 2016 to provide a roadmap for reforms to increase the diversification of the Saudi economy, stimulate private sector investment in new industries, and open up the kingdom to international investors.
Saudi Arabia 2018
Selected content from Saudi Arabia 2018: New opportunities in the Middle East’s biggest market:
Most macroeconomic indicators will improve in 2018, primarily supported by the country’s budget for the next year, which focuses on economic reforms and higher investment spending. Sectors including manufacturing, construction, mining, financial services, insurance, real estate, business services and telecommunication are expected to contribute significantly to GDP growth. The Ministry of Economy & Planning estimates real GDP growth will exceed 2.8 per cent and real non-oil GDP growth will reach 3.2 per cent in 2020.
After recording falls in revenues of about 41 per cent in 2015 and 17 per cent in 2016, rising oil prices, coupled with improving non-oil revenues, led to a 35 per cent year-on-year increase in government revenue in 2017.
The government is forecast to record declining budget deficits in 2018-22 and a surplus in 2023, as it benefits from higher oil revenues and significant increases in non-oil income, including the introduction of VAT, alongside tight restraint on public spending, which is forecast to grow by no more than 3 per cent annually between 2018 and 2023.
In September 2017, Saudi Arabia introduced the Nitaqat policy to increase the number of Saudi nationals in companies in the kingdom, especially in the private sector. In January 2018, the government also introduced a monthly expat levy per expatriate employee to encourage companies to hire more nationals. As a result, from 2018, hiring large numbers of foreign workers will be far costlier for companies in the kingdom.
With more than $1.4 trillion-worth of major projects planned or under way, Saudi Arabia is the biggest projects market in the region.
Riyadh’s fiscal consolidation drive restricted the value of project contracts awarded to $27bn in 2017, just over half the average annual value of $52bn recorded since 2010 and nearly two-thirds below the $77bn peak in 2013.
Saudi Arabia has awarded more than $418bn-worth of contracts across all sectors since 2010. Some $232bn-worth of contracts are still under execution. There are currently almost $483.5bn-worth of projects at the pre-execution stage. In terms of the number of projects, the transport sector has the biggest pipeline, with about $519bn-worth of projects in the tender, design or study phase.
Riyadh says it remains committed to plans to part privatise Saudi Aramco in 2018. In the meantime, Aramco is continuing to invest in its operations, and says it plans to spend $441bn over the next 10 years across the whole value chain in the oil and gas sector. While the value of contract awards in the hydrocarbons sector was slightly under $10bn in 2017, more than $55bn-worth of projects are expected to be awarded between 2018 and 2020.
The government has established the National Centre for Privatisation (NCP) to plan and oversee the procurement of public-private partnerships (PPPs) and other private sector initiatives.
At the start of 2018, Saudi Arabia had 10 PPP projects worth an estimated $5.4bn under execution and a further 24 projects worth about $38.6bn in the pre-execution phase.
The NCP will establish a framework for privatisation, and identify and prepare state assets for sale. Saudi Post Corporation and Saline Water Conversion Corporation are expected to be among the first organisations to be privatised.
Power and renewables
The power sector will also undergo privatisation, with up to 100 per cent of generation coming through private partners by 2020.
Riyadh is seeking to install some 3.45GW of renewable energy generation capacity by 2020. In the first quarter of 2017, the Renewable Energy Project Development Office (Repdo) issued prequalification documents for the 700MW first round of the kingdom’s clean energy programme. In January 2018, Repdo announced plans to begin the tendering process for the 4GW second round of the renewables programme this year.
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