Saudi Business Sector Achieves Trillions in Revenue Thanks to Government Incentives

King Abdullah Financial District (KAFD) in Riyadh (SPA)
King Abdullah Financial District (KAFD) in Riyadh (SPA)
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Saudi Business Sector Achieves Trillions in Revenue Thanks to Government Incentives

King Abdullah Financial District (KAFD) in Riyadh (SPA)
King Abdullah Financial District (KAFD) in Riyadh (SPA)

Government incentives have played a pivotal role in enabling Saudi Arabia’s business sector to achieve operational revenues of SAR 5.3 trillion ($1.4 trillion), with operational expenditures reaching SAR 2.2 trillion ($586 billion).

According to the 2023 Comprehensive Economic Survey conducted by the General Authority for Statistics (GASTAT), employee compensation totaled SAR 544.7 billion ($145 billion), while total fixed capital formation amounted to SAR 867.8 billion ($231 billion).

Legal and commercial expert Dr. Osama Al-Obaidi explained to Asharq Al-Awsat that the increase in operational revenues is largely due to government initiatives aimed at enhancing the private sector’s contribution to the national economy and GDP in line with Vision 2030. These efforts have driven innovation, localized technology, and established Saudi Arabia as a global investment destination while creating high-quality jobs that contribute significantly to wages and benefits.

Al-Obaidi emphasized that economic diversification under Vision 2030 has resulted in positive outcomes through incentives for investments in industry, mining, and strong construction activity. These efforts span residential, commercial, and investment projects while targeting key sectors like telecommunications, technology, artificial intelligence, electric vehicles, transportation, and logistics, as part of the Kingdom’s strategy to become a global logistics hub.

Additionally, Saudi Arabia’s focus on localizing technology, promoting innovation, and fostering tourism and entertainment has driven the growth of national industries and the service sector while boosting employment rates, Al-Obaidi noted.

The government’s commitment to creating a competitive environment, increasing non-oil sector contributions, and providing incentives has strengthened the Kingdom’s ability to attract foreign investments and create new job opportunities. This, in turn, has enhanced operational revenues and improved efficiency, productivity, and quality across industries and services.

Gross Domestic Product Impact

Economist Ahmed Al-Jubeir told Asharq Al-Awsat that the government is offering comprehensive incentives to private sector players, including small and medium enterprises (SMEs), to capitalize on available initiatives and programs. These efforts are designed to promote business growth and help companies achieve their goals, ultimately benefiting Saudi GDP and the broader economy.

The initiatives and programs cover various private sector activities, providing low-interest loans and opportunities to participate in strategic and large-scale projects in health, tourism, real estate, and more. Specialized programs for construction and equipment sectors are also part of these efforts, Al-Jubeir added.

The latest data from the General Authority for Statistics confirms the government’s ongoing support for the private sector, which recorded operational revenues of approximately SAR 5.3 trillion last year.

Moreover, data indicates that the manufacturing sector contributed 30% of total operational revenues, followed by mining and quarrying at 21.8%, and wholesale and retail trade at 16%. Together, these sectors accounted for 67.8% of total revenues. Other sectors, including construction, finance and insurance, information and communications, and transportation and storage, contributed smaller shares.

Operational Expenditures

The report also revealed that manufacturing represented 41.5% of total operational expenditures, followed by wholesale and retail trade at 22.3% and construction at 7.6%. Collectively, these sectors accounted for 71.4% of operational expenditures, with other sectors like information and communications, mining and quarrying, and finance and insurance contributing the remaining shares.

Fixed Capital Formation

Total acquisitions of fixed assets reached SAR 1.5 trillion ($399.5 billion), while sales of these assets amounted to SAR 646.2 billion ($172 billion). Wholesale and retail trade had the highest contribution to total fixed capital formation at 22.6%, followed by manufacturing at 22.4%, mining and quarrying at 14.9%, and construction at 12.2%.

Other sectors, including information and communications, transportation and storage, and finance and insurance, contributed smaller shares.

According to GASTAT, total salaries and wages amounted to SAR 461.1 billion ($122.8 billion), representing 84.6% of total employee compensation. Meanwhile, benefits and allowances totaled SAR 83.6 billion ($22 billion), making up 15.4% of total compensation.



Pakistan Set to Receive $20 Billion Loan From World Bank

FILE PHOTO-People wait for their turn to buy low-priced bun-kabab from a shop in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro
FILE PHOTO-People wait for their turn to buy low-priced bun-kabab from a shop in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro
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Pakistan Set to Receive $20 Billion Loan From World Bank

FILE PHOTO-People wait for their turn to buy low-priced bun-kabab from a shop in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro
FILE PHOTO-People wait for their turn to buy low-priced bun-kabab from a shop in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro

Pakistan is set to receive a loan of $20 billion from the World Bank over the next 10 years, aimed at improving the country’s key sectors, sources told Geo News on Saturday.

According to sources in the Ministry of Economic Affairs, the loan will be part of the World Bank's support under the Country Partnership Framework 2025-35, which focuses on sustainable economic development.

The loan is expected to be approved by the WB's Board of Directors on January 14. Once approved, Martin Raiser, the lender's Vice President, is expected to visit Islamabad to discuss the loan program and its implementation.

In addition to the $20 billion, two subsidiary entities of the World Bank will assist Pakistan in securing another $20 billion in private loans.

This would bring the total financial package to $40 billion, which will be allocated towards infrastructure development, climate resilience projects, and improving social services.

Meanwhile, The News newspaper reported that the government, in its bid to achieve an economic revival, has launched the National Economic Transformation Plan which aims to achieve ambitious economic targets, including doubling GDP growth and halving poverty over a five-year period.

The plan envisages attracting $29 billion anticipated investment under the supervision of the Special Investment Facilitation Council (SIFC) including $10 billion from the UAE, $5 billion from Saudi Arabia, $2 billion from Qatar, $2 billion from Azerbaijan, and $10 billion from Kuwait.

Meanwhile, the gross domestic product (GDP) target has been set at 6% of the GDP till the Fiscal Year 2028-29 whereas the per capita income in dollar terms is projected to go up to $2,405 from $1,680.