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Saudi Arabia Adopts Measures to Control Used Cars Market, Reduce Prices

A car showroom in Al-Shifa district, Riyadh (Asharq Al-Awsat)
A car showroom in Al-Shifa district, Riyadh (Asharq Al-Awsat)
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Saudi Arabia Adopts Measures to Control Used Cars Market, Reduce Prices

A car showroom in Al-Shifa district, Riyadh (Asharq Al-Awsat)
A car showroom in Al-Shifa district, Riyadh (Asharq Al-Awsat)

The Saudi Zakat, Tax and Customs Authority announced that it was possible to calculate the value-added tax (VAT) on the profit margin of the sale of certified used cars, without taking into account of the total sale value.

This regulation will be implemented conditionally, effective from July 1, 2023.

According to information obtained by Asharq Al-Awsat, the new steps came in response to the demands of the Federation of Saudi Chambers, in order to regulate and control the local market as well as reduce the prices of used vehicles.

The Federation of Saudi Chambers has held several meetings with the authority for the purpose of implementing Article 48 of the executive regulations of the value-added tax system, which defines the mechanisms for the supply of used goods.

Faisal Abu Shusheh, head of the National Committee for Car Dealers in the Federation of Saudi Chambers, told Asharq Al-Awsat that the decision would balance prices by calculating value-added tax on profit margins, and therefore the addition would be symbolic and contribute to lowering prices.

For his part, Muqrin Al-Mutairi, owner of a car showroom, said that the new measure would contribute to regulating the market and limiting manipulation in the sale of used cars. He also stressed that the decision would help reduce the prices of used vehicles in the local market.

The Saudi Ministry of Commerce has recently taken accelerated moves to protect the local car market from improper practices, after it witnessed a rise in prices and delays in delivering vehicles to customers.

The Ministry of Commerce requested car dealers to publish prices, policies, instructions and special procedures on their websites, and prevented rental companies from selling new vehicles.

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Business

IMF Team to Begin Meeting Officials in Ukraine

FILE PHOTO: International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US, as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas/File Photo
FILE PHOTO: International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US, as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas/File Photo
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IMF Team to Begin Meeting Officials in Ukraine

FILE PHOTO: International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US, as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas/File Photo
FILE PHOTO: International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US, as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas/File Photo

An International Monetary Fund will begin holding meetings in Ukraine on Sunday to discuss policy goals and challenges with government officials and others there, the Fund's country representative Vahram Stepanyan said on Sunday.
Ukraine's economy has been hit hard since Russia launched a full-scale invasion in February 2022, and the government has relied heavily on Western aid to finance social and humanitarian payments, said Reuters.
The IMF said last week its mission had begun its second review of a $15.6 billion multi-year loan program for the country.
The four-year program for Kyiv is part of a $115-billion global package to support the economy as Ukraine battles Russia's invading forces.
"An IMF team, led by Uma Ramakrishnan, Deputy Director of the Fund's European Department, starts meetings today in Kyiv with the Ukrainian authorities and other stakeholders," Stepanyan said in a statement.
"The high-level engagement will focus on policy goals and challenges in the context of Ukraine’s program supported by the IMF Extended Fund Facility (EFF) Arrangement."
The government in Kyiv has said that Ukrainian businesses have adjusted to the new wartime reality and that the economy has been recovering more quickly than expected this year.

Business

Egypt Targets 7-8% Sustainable Annual Growth

The Mosque of Muhammad Ali is seen shrouded in fog at the Saladin Citadel fortification in Cairo, Egypt, 12 September 2023. (EPA)
The Mosque of Muhammad Ali is seen shrouded in fog at the Saladin Citadel fortification in Cairo, Egypt, 12 September 2023. (EPA)
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Egypt Targets 7-8% Sustainable Annual Growth

The Mosque of Muhammad Ali is seen shrouded in fog at the Saladin Citadel fortification in Cairo, Egypt, 12 September 2023. (EPA)
The Mosque of Muhammad Ali is seen shrouded in fog at the Saladin Citadel fortification in Cairo, Egypt, 12 September 2023. (EPA)

Egypt’s Planning Minister Dr. Hala El-Saied said Egypt is targeting sustainable annual growth ranging between 7 to 8 percent.

Speaking at the "Story of a Homeland” conference that was inaugurated by President Abdel Fattah al-Sisi on Saturday, she added that despite diverse sources the growth remains unsustainable.

The minister remarked that Egypt aims to boost private sector investments from 36 percent to 65 percent of the overall investments by 2030.

The government is seeking to increase exports to $100 billion during the next five years to attract private investments worth $40 billion by 2060, and to proceed with its plans to boost the private sector's role in the economy.

Speaking at the same event, Prime Minister Mostafa Madbouli said Egypt would manage to produce all its petroleum products next year.

He added that crude oil will continue to be imported but will be refined in the country.

The PM said that the project to double the Suez Canal has replaced the idea of alternative routes.

Egypt plans to expand the length of the canal from 72 kilometers to 82 kilometers.

The canal is a prime source of foreign currency to Egypt.

Sisi had previously stated that the revenue generated from the Suez Canal is anticipated to reach $10.5 billion by the end of the year.

The annual revenues of the canal reached $9.4 billion during the 2022/2023 fiscal year, announced Suez Canal Authority (SCA) chief Osama Rabie in July.

During the G20 summit hosted by India last month, a memorandum of understanding was signed to set up the India-Middle East-Europe Economic Corridor. The IMEC project envisages laying down, alongside the railway line, cables for electricity and digital connectivity, as well as pipelines for clean/green hydrogen export.

Madbouli added that Egypt aims to increase the number of tourists from 15 million annually to 30 million in the next five years.

Business

MENA Climate Week 2023 to Discuss Progress, Solutions in Riyadh

Saudi Arabia will host the MENA Climate Week 2023 in Riyadh on October 8-12. (SPA)
Saudi Arabia will host the MENA Climate Week 2023 in Riyadh on October 8-12. (SPA)
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MENA Climate Week 2023 to Discuss Progress, Solutions in Riyadh

Saudi Arabia will host the MENA Climate Week 2023 in Riyadh on October 8-12. (SPA)
Saudi Arabia will host the MENA Climate Week 2023 in Riyadh on October 8-12. (SPA)

Saudi Arabia, in coordination and collaboration with the UN Framework Convention on Climate Change, is set to host the MENA Climate Week 2023 in Riyadh on October 8-12.

The event will bring together numerous countries, policymakers, influential organizations from around the world, in addition to representatives from the UN and related bodies, civil society, and the business sector.

The aim is to exchange perspectives on climate solutions, cooperate in finding practical and rational approaches to address climate change and mitigate its effects.

Discussions will encompass policy frameworks, investment opportunities, research and development initiatives, and the spread of various technological solutions, such as renewable energy, energy efficiency efforts, hydrogen, carbon capture and storage, and carbon dioxide removal.

MENA Climate Week 2023 will provide the Kingdom with an opportunity to showcase its efforts and accomplishments in tackling the challenges posed by climate change.

In 2021, Prince Mohammed bin Salman, Crown Prince and Prime Minister, launched the Saudi and Middle East Green initiatives.

The Saudi Green initiative aims to reduce carbon emissions by 278 million tons annually by 2030.

The other initiative seeks to mobilize efforts of various stakeholders to reduce carbon emissions, equivalent to 10% of global contributions, and reduce carbon emissions from oil production in the region by over 60%.

On December 4, the third edition of the Saudi Green Initiative Forum will be launched, coinciding with the COP28 conference. This move reflects the Kingdom’s commitment and ongoing efforts to support the global climate action agenda and take tangible actions to address environmental challenges.

Furthermore, in October 2021, the Crown Prince announced the Kingdom’s target of achieving net-zero emissions by 2060 through a circular carbon economy approach, aligning with its development plans and promoting economic diversification.

Business

Saudi Budget 2024: Anticipated Spending of SAR 1.251 Bn, Revenues of SAR 1.172 Bn

Expectations for the Saudi economy are an extension of its positive performance (SPA)
Expectations for the Saudi economy are an extension of its positive performance (SPA)
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Saudi Budget 2024: Anticipated Spending of SAR 1.251 Bn, Revenues of SAR 1.172 Bn

Expectations for the Saudi economy are an extension of its positive performance (SPA)
Expectations for the Saudi economy are an extension of its positive performance (SPA)

Saudi Arabia’s Finance Ministry has announced a preliminary statement of budget for the fiscal year 2024 with expenditures valued at SAR 1,251 billion and revenues projected to be SAR 1,172 billion.

A limited deficit is estimated to be recorded at about 1.9 percent.

Finance Minister Mohammed al-Jadaan reaffirmed the Saudi government’s commitment to ongoing structural reforms on both the financial and economic fronts.

These reforms aim to foster economic growth, diversify the economy, and sustain economic growth rates while maintaining financial sustainability.

According to al-Jadaan, this will be achieved through the continued implementation of programs and projects outlined in the Kingdom’s national transformation plan, “Vision 2030”.

The launch of various initiatives and strategies will also help in the development of promising economic sectors, attracting investments, stimulating industries, and increasing both local content and non-oil exports in Saudi Arabia.
The minister further emphasized the significant and active role played by the Public Investment Fund and development funds in ensuring the ongoing implementation of structural reforms.

These reforms aim to boost the growth of non-oil sector activities at high and sustainable rates over the medium term, said al-Jadaan.

He also projected a growth in real Gross Domestic Product (GDP) by 4.4% for the upcoming fiscal year.

In addition to achieving the Kingdom’s goals of financial sustainability and directing expansionary spending to expedite the implementation of major projects and strategies, the budget also focuses on attracting investment, stimulating economic activity, and developing Saudi Arabia’s public financial performance.

The minister added that “the process of analyzing the financial and economic risks facing the Kingdom’s economy is a vital part of understanding the current situation, as it contributes to adopting effective policies and strategies to deal with these risks.”

He said that despite any crises the world is witnessing and their negative impact on the global economy – as was the case with the coronavirus pandemic and geopolitical tensions that negatively affected global supply chains – Saudi Arabia is in a “solid financial position.”

Business

UK to Build Undersea Cable to Tap Moroccan Renewable Power

An aerial view of solar panels at the Nour 1 concentrated solar power plant outside Ouarzazate in central Morocco (AFP)
An aerial view of solar panels at the Nour 1 concentrated solar power plant outside Ouarzazate in central Morocco (AFP)
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UK to Build Undersea Cable to Tap Moroccan Renewable Power

An aerial view of solar panels at the Nour 1 concentrated solar power plant outside Ouarzazate in central Morocco (AFP)
An aerial view of solar panels at the Nour 1 concentrated solar power plant outside Ouarzazate in central Morocco (AFP)

The United Kingdom is planning to extend a subsea cable for the transmission of renewable energy from Morocco in a project declared a project of "national significance."

Reuters reported that Xlinks, a company chaired by former Tesco chief executive Dave Lewis, wants to build 3,800 kilometers of subsea cables to supply solar and wind power from the Sahara to seven million British homes by 2030.

While Xlinks called the government's recognition of its project "a major milestone," many challenges remain.

As well as building the world's most extended high-voltage direct current subsea cable, Xlinks needs to secure more funding, agree on long-term pricing contracts, and be granted permission to run through Spanish and French waters.

Lewis disclosed to the Financial Times that the estimated cost is between £20 billion and £22 billion.

Xlinks also noted that the initiative would generate approximately 10,000 jobs in Morocco, with 2,000 becoming permanent positions, aligning with the country's energy export strategy.

New UK energy security and net zero minister Claire Coutinho said the project was nationally significant because of its potential to help Britain ditch fossil fuels.

"The proposed project could play an important role in enabling an energy system that meets the UK's commitment to reduce carbon emissions and the government's objectives to create a secure, reliable, and affordable energy supply for consumers," the statement said.

Business

WTD 2023 Concludes in Riyadh with Participation of More Than 500 Experts from 120 Countries

More than 50 tourism ministers, 120 officials, and over 500 experts and leaders in the sector and in this year’s celebration of the WTD. SPA
More than 50 tourism ministers, 120 officials, and over 500 experts and leaders in the sector and in this year’s celebration of the WTD. SPA
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WTD 2023 Concludes in Riyadh with Participation of More Than 500 Experts from 120 Countries

More than 50 tourism ministers, 120 officials, and over 500 experts and leaders in the sector and in this year’s celebration of the WTD. SPA
More than 50 tourism ministers, 120 officials, and over 500 experts and leaders in the sector and in this year’s celebration of the WTD. SPA

A series of events organized in Riyadh on the occasion of the 2023 World Tourism Day (WTD) concluded with the World Tourism Organization (UNWTO) hailing this year’s celebration as the largest and most influential ever in its 43-year history.

More than 50 tourism ministers, 120 officials, and over 500 experts and leaders in the sector and UNWTO Secretary-General Zurab Pololikashvili participated in this year’s celebration of the WTD which was held under the theme, “Tourism & Green Investments.”

Minister of Tourism Ahmed bin Aqeel Al-Khateeb extended his thanks and gratitude to the Kingdom’s leadership for their constant and endless support to the tourism sector, attributing the historic leaps the sector has achieved in terms of creating jobs and investments to the special attention and tremendous support of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister.

Al-Khateeb has also highlighted the successes the Kingdom has achieved and its contributions to the global tourism landscape through organizing and hosting several international events that had their impact on bringing the global tourism sector to pre-pandemic levels.

The activities and sessions of the WTD in Riyadh focused on enhancing international cooperation and sustainable development in the global tourism sector. The WTD also witnessed the Kingdom’s announcement of new details about the International Tourism Academy, Riyadh’s gift to the world. The academy provides international educational and vocational programs in tourism and hospitality fields.

Business

Saudi Finance Minister Participates in Berlin Global Dialogue 2023

Saudi Minister of Finance Mohammed bin Abdullah Al-Jadaan attends the G20 Finance Ministers and Central Bank Governors Meeting in Nusa Dua, Bali, Indonesia, 15 July 2022. Made Nagi/Pool via REUTERS/File Photo
Saudi Minister of Finance Mohammed bin Abdullah Al-Jadaan attends the G20 Finance Ministers and Central Bank Governors Meeting in Nusa Dua, Bali, Indonesia, 15 July 2022. Made Nagi/Pool via REUTERS/File Photo
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Saudi Finance Minister Participates in Berlin Global Dialogue 2023

Saudi Minister of Finance Mohammed bin Abdullah Al-Jadaan attends the G20 Finance Ministers and Central Bank Governors Meeting in Nusa Dua, Bali, Indonesia, 15 July 2022. Made Nagi/Pool via REUTERS/File Photo
Saudi Minister of Finance Mohammed bin Abdullah Al-Jadaan attends the G20 Finance Ministers and Central Bank Governors Meeting in Nusa Dua, Bali, Indonesia, 15 July 2022. Made Nagi/Pool via REUTERS/File Photo

Saudi Minister of Finance Mohammed bin Abdullah Al-Jadaan participated in the Berlin Global Dialogue 2023 hosted by the European School of Management and Technology (ESMT) on September 28 and 29.

During the event in the German capital, Al-Jadaan held meetings with government officials and major global investors and participated in sessions on macro-financial policies and economic and financial affairs.

The dialogue seeks to provide a platform for effective communication and dialogue between government leaders and the business sector.

The goal of the platform is to contribute to formulating proper policies and promoting global economic growth.

Business

Saudi Fund for Development, Seychelles Sign $25 Million Development Loans

The CEO of the SFD signed two development loan agreements with Seychelles Minister of Finance, National Planning and Trade. SPA
The CEO of the SFD signed two development loan agreements with Seychelles Minister of Finance, National Planning and Trade. SPA
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Saudi Fund for Development, Seychelles Sign $25 Million Development Loans

The CEO of the SFD signed two development loan agreements with Seychelles Minister of Finance, National Planning and Trade. SPA
The CEO of the SFD signed two development loan agreements with Seychelles Minister of Finance, National Planning and Trade. SPA

CEO of the Saudi Fund for Development (SFD) Sultan bin Abdulrahman Al-Marshad signed on Friday two development loan agreements with Seychelles Minister of Finance, National Planning and Trade Naadir Hassan.

Through the loans, the SFD is contributing $25 million to support the social housing project in the Seychelles and the reconstruction of La Digue School project.

The first loan agreement worth $15 million will contribute to establishing residential buildings for low-income families in various regions of the country.

The second agreement worth $10 million will help provide a modern educational environment in the Seychelles.

Since its establishment in 1974, the SFD has implemented 700 development projects and programs in more than 90 countries with a value surpassing $18.7 billion.

Business

Oil Up $1 on Tight US Supply, China Demand

Gas prices are seen at a gas station in Los Angeles on September 28, 2023. California gas prices are nearing USD $7 per gallon in some locations as oil prices surge toward $100 a barrel. (Photo by Robyn Beck / AFP)
Gas prices are seen at a gas station in Los Angeles on September 28, 2023. California gas prices are nearing USD $7 per gallon in some locations as oil prices surge toward $100 a barrel. (Photo by Robyn Beck / AFP)
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Oil Up $1 on Tight US Supply, China Demand

Gas prices are seen at a gas station in Los Angeles on September 28, 2023. California gas prices are nearing USD $7 per gallon in some locations as oil prices surge toward $100 a barrel. (Photo by Robyn Beck / AFP)
Gas prices are seen at a gas station in Los Angeles on September 28, 2023. California gas prices are nearing USD $7 per gallon in some locations as oil prices surge toward $100 a barrel. (Photo by Robyn Beck / AFP)

Oil prices rose on Friday and were headed for a gain of about 3% for the week, driven by tight US supply and expectations of strong fuel demand in China during the Golden Week holiday.

US West Texas Intermediate crude (WTI) was up $1.31, or 1.43%, to $93.02 per barrel at 1208 GMT.

Front-month Brent November futures were up 88 cents, or 0.92%, at $96.26 per barrel ahead of the contract's expiry later in the day. The more-liquid Brent December contract was up 97 cents, or 1.04%, at $94.07 per barrel.

A backdrop of tight supplies in the US provided further price support, with storage at Cushing, Oklahoma, the delivery point for US crude futures, already at its lowest since July 2022.

"Any additional decline would threaten to bring them down to a critical level, which could make further withdrawals difficult," said Commerzbank analyst Carsten Fritsch.

China's fuel demand was set to firm as the week-long Golden Week holiday began on Friday.

"(An) increase in international travel during the Golden Week holiday is boosting Chinese oil demand," ANZ analysts said in a client note.

Domestic travel is also expected to boost demand, with data from flight app Umetrip showing the average number of daily flights booked is a fifth higher than for Golden Week in 2019, before COVID.

Meanwhile, inflation in the euro zone fell to a two-year low of 4.3% in September, the latest Eurostat flash reading showed, suggesting the European Central Bank's policy of steady interest rate hikes was taking effect.

Russia is considering introducing fuel export quotas if the current export ban is not effective in bringing down domestic prices.

Russian gasoline and diesel exchange prices on the St. Petersburg International Mercantile Exchange (SPIMEX) fell slightly on Friday.

Brent is forecast to average $89.85 a barrel in the fourth quarter, and $86.45 in 2024, according to a survey of 42 economists compiled by Reuters on Friday.

Business

IMF: Saudi Economy Grows as it Diversifies

The International Monetary Fund says that non-oil exports reached a record high of $84.4 billion in 2022 (SPA)
The International Monetary Fund says that non-oil exports reached a record high of $84.4 billion in 2022 (SPA)
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IMF: Saudi Economy Grows as it Diversifies

The International Monetary Fund says that non-oil exports reached a record high of $84.4 billion in 2022 (SPA)
The International Monetary Fund says that non-oil exports reached a record high of $84.4 billion in 2022 (SPA)

The International Monetary Fund (IMF) has affirmed that the Saudi economy is undergoing a transformation, as reforms are being implemented to reduce dependence on oil, diversify sources of income, and enhance competitiveness.

In an article published on its website on Thursday, titled “Saudi Arabia's Economy Grows as it Diversifies,” authored by IMF economists Amine Mati and Sidra Rehman, the Fund stated that this year marks a significant turning point in the ambitious journey of the Kingdom of Saudi Arabia towards its “Vision 2030.”

As shown in the latest IMF annual review of the Kingdom’s economy, progress has been most notably reflected in non-oil growth, which has accelerated since 2021, averaging 4.8% in 2022.

Non-oil revenue doubled in just four years due to VAT rate increases and high regulatory compliance.

Non-oil exports reached a record $84.4 billion in 2022.

Shares of manufacturing and services increased by 15% over the past 20 years, and the tourism sector is contributing 4.5% to GDP.

According to the IMF, two reforms are playing a key role in Saudi Arabia’s economic transformation: Labor market reform and Digitalization.

The share of Saudis in high-skilled jobs increased from 32 % in 2016 to 42 % in 2022. Female workforce participation has doubled over the past four years, reaching 37% and clearly surpassing the Vision 2030 target of 30%.

Meanwhile, the digital sector’s contribution to overall growth increased from 0.2% in 2016 to 15% in 2022, which has bolstered the financial sector’s resilience, government efficiency and financial inclusion.

Despite lower overall growth reflecting additional oil production cuts, non-oil growth will remain close to 5% in 2023, spurred by strong domestic demand.

As a result of a new set of laws to promote entrepreneurship, protect investors’ rights, and reduce the costs of doing business, new investment deals and licenses grew by 95% and 267% in 2022, respectively.

In addition, the Saudi Investment Fund (PIF) has been deploying capital, including to help stimulate private sector investment.

Moreover, the Saudi economy’s non-oil growth has been spurred by strong domestic demand, particularly private non-oil investment. Sustaining this performance requires pursuing sound macroeconomic policies and maintaining the reform momentum, irrespective of developments in oil markets.

Challenges ahead include making sure large projects generate returns and boost productivity, which are vital for sustained economic growth and will help further diversify the economy.

There is a need to continue the ongoing efforts to foster a more conducive environment for innovation and invest in workforce skills that complement the diversification agenda.