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)
TT

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.



Saudi PIF Invests $200 Million in ETF Bond Fund

The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
TT

Saudi PIF Invests $200 Million in ETF Bond Fund

The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)

State Street Global Advisors, a subsidiary of State Street Corporation, announced that Saudi Arabia’s Public Investment Fund (PIF) has invested SAR 750 million ($200 million) in the newly launched SPDR J.P. Morgan Saudi Aggregate Bond ETF.

According to a statement released by the company on Wednesday, this fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). It is listed in both the London Stock Exchange and Germany’s Xetra, offering investors the opportunity to track government and quasi-government bonds denominated in either the Saudi Riyal or the US Dollar, including sukuk (Islamic bonds).

This investment aligns with the objectives of Saudi Vision 2030, representing a significant step toward enhancing the international presence of Saudi Arabia’s financial markets and attracting foreign investments. The fund is available to investors across several European countries, including Austria, Denmark, France, Germany, and Italy.

Commenting on the investment, Yazid Al-Humaid, Deputy Governor and Head of MENA Investments at PIF, said: “The fund continues to create opportunities and enable access to diverse capital markets in the Kingdom. Investing in the first internationally listed Saudi fixed-income ETF underscores PIF’s commitment to deepening Saudi capital markets, attracting investors, and fostering partnerships across global financial centers.”

CEO of State Street Global Advisors Yi-Hsin Hung emphasized that the launch of the fund is a significant milestone in providing innovative opportunities for investors while contributing to Saudi Arabia’s economic growth.