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Saudi Industrial Investments Rise by 54% Following Exemption from Financial Fees

A factory in Saudi Arabia. (SPA)
A factory in Saudi Arabia. (SPA)
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Saudi Industrial Investments Rise by 54% Following Exemption from Financial Fees

A factory in Saudi Arabia. (SPA)
A factory in Saudi Arabia. (SPA)

The Federation of Saudi Chambers announced that industrial investments in the Kingdom have increased by 54%, reaching around SAR 1.5 trillion. This surge follows a 2019 government decision to exempt the industrial sector from financial fees.

A report by the Federation assessed the economic impact of the government's decision to bear the financial fees for the industrial sector from 2019 until the end of 2025. The study used a comprehensive approach, measuring the decision’s impact based on seven economic indicators: contribution to GDP, the number of industrial establishments, investment volume, employment, non-oil exports, the quality of national products, and foreign investments in the sector.

According to the report, economic data and indicators confirm the positive effects of the exemption on the national economy overall, and the industrial sector in particular.

The sector’s GDP contribution rose from SAR 392 billion in 2019 to SAR 592 billion in 2023, accounting for 14.7% of GDP. The number of industrial establishments grew from 7,625 in 2019 to 11,868 by 2024, a growth rate of 55.6%. Additionally, investments in the sector increased by 54%, reaching approximately SAR 1.5 trillion compared to SAR 992 billion previously.

The report highlighted that foreign investments in the industrial sector have grown, thanks to the decision to bear financial fees. The number of foreign factories increased from 622 to 1,067, reflecting a growth rate of 71.5%. The capital invested in the sector grew from SAR 43 billion to SAR 93 billion, a growth rate of 116.2%.

By the end of the first quarter of 2024, the number of workers in the industrial sector reached around 1.2 million, including 358,000 Saudis, with a localization rate of about 28%. Saudi workers in the industrial sector represent around 12.9% of the total Saudis employed in the private sector.

The industrial sector became the largest contributor to creating jobs for Saudis during the period from Jan. 1, 2023, to March 31, 2024, with the number of nationals increasing by 59%, adding more than 82,000 jobs.

The report also noted that the industrial sector helped boost non-oil exports, which reached an estimated SAR 208 billion, achieving a 12% growth.

Additionally, the report explained that the decision contributed to improving the quality of national products, through the adoption of new business models by industrial establishments, the localization of the latest technologies in manufacturing, the attraction of skilled talent, and the increase in product offerings to meet local market demands.

These efforts resulted in a rise in the percentage of industrial product exports, increased domestic demand for local products, and a higher number of products receiving the Saudi Quality Mark from the Saudi Standards, Metrology, and Quality Organization.

In September 2019, the government issued a decision to bear the financial fees imposed on expatriate workers in industrial establishments. The decision was recently extended until the end of 2025. Over 8,000 industrial establishments have benefited from the move, with the estimated cost of expatriate labor fees on the industrial sector amounting to around SAR 5 billion.

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IEA, IMF and World Bank to Coordinate Response to Middle East War's Impact

A displaced man prepares his shisha, at a temporary encampment for displaced people, amid escalating hostilities between Israel and Hezbollah, in Beirut, Lebanon, April 1, 2026. REUTERS/Raghed Waked
A displaced man prepares his shisha, at a temporary encampment for displaced people, amid escalating hostilities between Israel and Hezbollah, in Beirut, Lebanon, April 1, 2026. REUTERS/Raghed Waked
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IEA, IMF and World Bank to Coordinate Response to Middle East War's Impact

A displaced man prepares his shisha, at a temporary encampment for displaced people, amid escalating hostilities between Israel and Hezbollah, in Beirut, Lebanon, April 1, 2026. REUTERS/Raghed Waked
A displaced man prepares his shisha, at a temporary encampment for displaced people, amid escalating hostilities between Israel and Hezbollah, in Beirut, Lebanon, April 1, 2026. REUTERS/Raghed Waked

The heads of the International Energy Agency, International Monetary Fund, and World Bank on Wednesday said they will form a coordination group to maximize their response to the significant economic and energy impacts of the war in the Middle East.

In a joint statement, the three global bodies noted that the war had caused major disruptions in the region and triggered one of the largest supply shortages in global energy market history.

"At these times of high uncertainty, it is paramount that our institutions join forces to monitor developments, ⁠align analysis, and coordinate ⁠support to policymakers to navigate this crisis," the heads of the IMF, IEA and World Bank said.

The new coordination group will assess the severity of impacts across countries, coordinate a response mechanism, and mobilize stakeholders to deliver support to countries in need, the international bodies said.

The response mechanism could include targeted policy advice, assessment of potential financing needs ⁠and related provision of financial support, including through low or zero-percent financing, as well as unspecified risk mitigation tools, they said.

Thousands of people have been killed across the Middle East in the war, which began when the US and Israel struck Iran on February 28, triggering Iranian attacks on Israel, US bases and the Gulf states, while opening a new front in Lebanon.

Now in its second month, the conflict has spread across the region, disrupting energy supplies and threatening to send the global economy into a tailspin.

"The impact is substantial, global, and highly asymmetric, disproportionately ⁠affecting energy ⁠importers, in particular low-income countries," Reuters quoted the IMF, IEA and World Bank as saying.

They noted that the war was already resulting in higher oil, gas and fertilizer prices, while triggering concerns about food prices and affecting global supply chains of helium, phosphate, aluminum, and other commodities. Tourism had also been hit.

"The resulting market volatility, weakening of currencies in emerging economies, and concerns about inflation expectations raise the prospect of tighter monetary stances and weaker growth," the organizations said.

"We are committed to working together to safeguard global economic and financial stability, strengthen energy security, and support affected countries and people on their path to sustained recovery, growth, and job creation through reforms," they said.

Business

Saudi Arabia: Mawani Announces Commencement of Container Terminal Operations at Jubail Port

Jubail Commercial Port. SPA
Jubail Commercial Port. SPA
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Saudi Arabia: Mawani Announces Commencement of Container Terminal Operations at Jubail Port

Jubail Commercial Port. SPA
Jubail Commercial Port. SPA

The Saudi Ports Authority “Mawani” has announced the commencement of container terminal operations at Jubail Commercial Port under a privatization contract with Saudi Global Ports (SGP), backed by private sector investments exceeding SAR2 billion ($533 million).

The new move is in line with the objectives of the National Transport and Logistics Strategy under Saudi Vision 2030, Mawani said in a statement on Wednesday.

“The commencement of operations comes as part of the implementation of the privatization contract signed between the two parties, which includes the development of infrastructure and the modernization of operational equipment,” it said.

“This includes increasing berth length from 1,000 m to 1,400 m, deepening berths from 14 m to 18 m, increasing the number of STS cranes from 6 to 10, and raising the number of RTG cranes from 13 to 29 automated, environmentally friendly cranes,” the statement added.

According to Mawani, the launch will increase the container terminal’s handling capacity from 1.5 million TEUs to 2.4 million TEUs annually, across an area of 460,000 square meters.

This will enable the terminal to accommodate large next-generation vessels, enhance operational efficiency, and reinforce Jubail Commercial Port’s position as a key logistics gateway supporting the Kingdom’s sustainable growth.

It will also strengthen operational integration with the Group’s terminals across the Eastern Coast ports.

Business

Germany Growth Forecasts Slashed as Mideast War Hits Economy

Germany's economy is struggling with fierce Chinese competition in sectors from cars to chemicals © Ronny HARTMANN / AFP/File
Germany's economy is struggling with fierce Chinese competition in sectors from cars to chemicals © Ronny HARTMANN / AFP/File
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Germany Growth Forecasts Slashed as Mideast War Hits Economy

Germany's economy is struggling with fierce Chinese competition in sectors from cars to chemicals © Ronny HARTMANN / AFP/File
Germany's economy is struggling with fierce Chinese competition in sectors from cars to chemicals © Ronny HARTMANN / AFP/File

Leading economic institutes more than halved their growth forecast for Germany on Wednesday, warning that the energy shock caused by the Middle East war would hit Europe's top economy hard.

A group of leading institutes slashed their joint GDP growth forecast for 2026 to 0.6 percent, down from a September prediction of 1.3 percent.

Inflation is now forecast to rise to 2.8 percent, up from 2.0 percent, "weighing on household purchasing power".

"The energy price shock triggered by the Iran war is hitting the recovery hard," said economist Timo Wollmershaeuser of the Ifo institute, adding that increased government spending was nevertheless "preventing a stronger slide", AFP reported.

Oil and natural gas prices have surged since the end of February, when the United States and Israel attacked Iran, killed its supreme leader and plunged the Middle East into war.

Iran has since closed the Strait of Hormuz to ships of countries it considers allied with the US and Israel, effectively blocking a sea lane that normally transports about a fifth of the world's oil and liquefied natural gas.

Higher inflation in Germany would hit consumer spending, the institutes said, weighing on an already weak economy that has barely grown since a burst of pent-up demand after the Covid pandemic in 2022.

The government on Wednesday introduced rules allowing petrol stations to only raise prices once a day, at noon.

But motorist Sebastian, a 49-year-old estate agent who did not want to give his surname, told AFP at a Frankfurt petrol station that this was not enough to protect his spending power.

"Whether the price of petrol changes once a day or 10 times a day doesn't really matter," he said, adding it was "certainly not enough" to lower his costs.

Germany's economy, struggling with fierce Chinese competition in sectors from cars to chemicals, was in the doldrums even before US President Donald Trump last year imposed sweeping new tariffs before starting the Mideast war in late February.

Chancellor Friedrich Merz, who took office last May, vowed to borrow and spend hundreds of billions through a special infrastructure fund over coming years in what was dubbed a spending "bazooka" aimed at getting the economy back on its feet.

But the economists said that much of the money was simply paying for day-to-day spending.

"Government expenditure on consumption is rising much more sharply than investment," economist Oliver Holtemoeller of the Halle Institute for Economic Research said. "That was not the idea behind changing the financing rules."

The outlook for the longer term was also dire.

Citing low productivity, industrial decline and an ageing population, the institutes warned that Germany's economy would soon be unable to grow sustainably.

"We have also reassessed the structural changes in the German economy and, in particular, revised our forecast for industrial growth downwards," Wollmershaeuser said.

In an era when "demographic change is hitting with full force", he said, "potential growth will come to a standstill by the end of the decade, and we will have to get used to average GDP growth rates of zero percent".

Speaking to broadcaster Welt TV, Economy Minister Katherina Reiche said the government was working on reducing labour taxes and energy costs but that Germans would have to get used to working more over the course of their lives.

"We need to make this country vigorous again," she said. "Germany needs to get its will to win back."