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Saudi Arabia and Italy Boast Trade Volume of Around $10.9 Billion

Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
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Saudi Arabia and Italy Boast Trade Volume of Around $10.9 Billion

Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)
Saudi and Italian officials meet during Meloni's visit to the Kingdom on Sunday. (SPA)

Economic affairs were the key focus of Italian Prime Minister Giorgia Meloni’s visit to Saudi Arabia, which began on Saturday and continues until Monday. During her first official trip to the Kingdom, Meloni aims to strengthen bilateral relations and boost trade ties before heading to Bahrain.

As members of the G20, Saudi Arabia and Italy share mutual economic interests. The establishment of the Saudi-Italian Joint Committee has played a pivotal role in advancing economic, trade, and investment relations between the two countries. It has also created effective governance frameworks to foster collaboration and elevate their relationship to the level of a strategic partnership.

Strategic partnerships

Saudi Arabia is Italy’s second-largest trading partner in the region. In 2023, the trade volume between the two countries reached around $10.8 billion. Saudi imports from Italy were valued at $5.875 billion, while exports to Italy amounted to $4.921 billion, including $737 million in non-oil exports. Globally, Italy ranks as the 10th largest exporter to the Kingdom.

Both nations are working to strengthen economic and investment ties by regularly convening the Saudi-Italian Joint Business Council, increasing official and trade delegation visits, encouraging joint ventures, and organizing trade and investment events.

Currently, more than 150 Italian companies operate in Saudi Arabia, with Italy’s foreign direct investment (FDI) stock in the Kingdom exceeding $4.6 billion.

Renewable energy cooperation

Saudi Arabia and Italy are collaborating in the renewable energy sector as the Kingdom focuses on its transition to carbon neutrality. Italy, with its extensive experience in renewable energy technologies, is seeking to establish a long-term partnership with the Kingdom, a potential future leader in green hydrogen production.

In September 2023, the Saudi-Italian Investment Forum, hosted in Milan by Saudi Arabia’s Ministry of Investment in partnership with Italy’s Ministry of Enterprises and Made in Italy, resulted in the signing of 21 agreements and memorandums of understanding. They covered sectors such as traditional and clean energy, healthcare, real estate, waste management, and more.

According to the Italian government, Italy views Saudi Arabia as a key partner, especially regarding investment opportunities tied to the Kingdom’s Vision 2030. The transformative reform plan aims to diversify the Saudi economy, shifting its reliance from oil to a service-based model. It emphasizes tourism, startups, and small- and medium-sized enterprises (SMEs) in high-value-added sectors.

Saudi Arabia ranks sixth globally in terms of the number of visas issued by Italy, underscoring Italy’s position as a leading destination for Saudi tourists.

Italy is also among the top 20 countries investing in Saudi Arabia, with over 150 Italian companies holding foreign investment licenses in the Kingdom. The Saudi-Italian Investment Forum in 2023 further solidified economic ties, with the signing of 21 agreements spanning a wide range of sectors.

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Business

Middle East Bears Brunt of Tanker War as Saudi Arabia Weathers Crisis with Alternative Logistics Network

A vessel at the Strait of Hormuz, as seen from Musandam, Oman, July 8, 2026. (Reuters)
A vessel at the Strait of Hormuz, as seen from Musandam, Oman, July 8, 2026. (Reuters)
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Middle East Bears Brunt of Tanker War as Saudi Arabia Weathers Crisis with Alternative Logistics Network

A vessel at the Strait of Hormuz, as seen from Musandam, Oman, July 8, 2026. (Reuters)
A vessel at the Strait of Hormuz, as seen from Musandam, Oman, July 8, 2026. (Reuters)

At a time when the global economy is struggling to avoid a sharp recession, the International Monetary Fund’s updated World Economic Outlook showed a deeply divided picture.

A surge in artificial intelligence investment, productivity gains and US tax cuts helped keep global growth at 3% this year, slightly below the 3.1% forecast in April, absorbing part of the severe energy shock caused by the Iran war and the closure of the Strait of Hormuz.

But the regional cost was steep and unprecedented. The prolonged closure of the Gulf shipping artery prompted the IMF to sharply downgrade its outlook for the Middle East and North Africa, pushing the region into a 0.5% contraction, one of its worst annual performances since the start of the century.

Major oil producers were caught between lower output and disrupted supply logistics.

At the center of the turmoil, Saudi Arabia emerged as one of the most resilient economies.

Although the IMF cut its growth forecast for the Kingdom this year to 1.7%, it raised its projection for next year to 5.5%, defying the darker regional scenario.

The Kingdom was supported by alternative routes that protected its momentum, while major producers such as Iraq, Kuwait and Qatar face temporary contractions before a broad regional rebound in 2027.

Recent military developments delivered a severe logistics shock that paralyzed flows equivalent to one-fifth of global oil and gas. Although releases from strategic oil reserves and commercial production eased the crisis, prices remained 25% to 32% above pre-war levels.

The jump in energy costs directly froze two years of global progress against inflation.

The IMF raised its global inflation forecast by 0.3 percentage point to 4.7% in 2026, saying the monetary easing cycle had seen a “temporary pause, not a break in the broader trend.”

Regional growth map

The IMF’s new baseline scenario assumes the Strait of Hormuz will begin reopening gradually in mid-July and return to normal by March 2027. The prolonged closure redrew the region’s growth map as follows:

  • The Middle East and North Africa region is expected to contract. The IMF cut its 2026 estimate for the region for the second time in three months, forecasting a 0.5% contraction, down from 1.1% growth in its April update. That would make it the only region in the world expected to record a decline in gross domestic product, before a strong rebound in 2027 as exports recover and trade through the Strait of Hormuz returns to pre-war levels. Deniz Igan, head of the IMF’s research department, described the expected recovery as “V-shaped”.
  • Iraq, Kuwait and Qatar, among the commodity exporters most affected by transport disruptions and energy production constraints, are expected to face sharp, painful contractions this year, followed by a surge in expansion and double-digit growth in 2027.
  • Türkiye is also under pressure. The IMF cut its 2026 growth forecast for Türkiye for the second time this year to 2.9%, down from 3.4% in April, under pressure from weak domestic demand, higher energy prices and tighter financial conditions.
  • Iran, despite resilient oil exports early in the year and an upward revision to its forecast, remains weighed down by sanctions and war. Its economy is expected to contract sharply by 5.4% in 2026, pending the broader regional rebound in 2027.

Saudi resilience

At the center of the regional disruption, Saudi Arabia’s official indicators appeared more resilient. The IMF said the Saudi economy was “less affected” by the shock than its Gulf neighbors.

The Fund’s revisions to Saudi figures reflected recent geopolitical developments compared with its April report, lowering its 2026 growth forecast for the Kingdom by 1.2 percentage points to 1.7% this year.

By contrast, the outlook carried a more optimistic revision for 2027. The IMF raised its forecast for Saudi Arabia's growth by 1 percentage point from its April estimate, projecting growth of 5.5% as tensions ease and waterways reopen.

US and China hold up, Europe bears the cost

The IMF’s documentation showed a stark divergence among major powers, depending on their exposure to the technology boom and energy sources.

The United States stood apart. The world’s largest economy retained its strength, with its growth forecast steady at 2.3% in 2026. It was supported by a dual boost from massive investment in artificial intelligence, the effects of President Donald Trump’s 2025 tax cuts and strong stock markets.

China, the world’s second-largest economy, received a slight upward revision and is now expected to grow by 4.6%. Despite its property-sector crisis and the energy shock, Beijing was supported by public works spending, booming exports and a surge in high-tech manufacturing.

Asia seized the technology opportunity. The four major exporters of AI equipment and hardware — Taiwan, South Korea, Thailand and Malaysia — recorded strong and resilient growth, reflecting gains from the surge in technology demand.

Europe paid the price. The 21 eurozone countries were directly hit by rising prices, with their collective growth forecast falling to just 0.9%. France’s forecast retreated to only 0.6%, reflecting its direct exposure to the energy shock.

Conflict risks remain

Although the global economy proved more resilient than feared, the IMF ended its report with a sharp warning. Igan said renewed military conflict and the latest strikes between the United States and Iran in recent hours could leave the global economy in a “much worse position.”

The Fund warned that the depletion of countries’ strategic oil reserves would quickly narrow their room for maneuver, opening the door to sharp swings in commodity prices, disruption in global trade flows, or a sudden and painful correction in overblown expectations for technology and artificial intelligence markets.

Business

Libya Signs Exploration and Production Deal for Ghadames Basin with UCC Holding

The headquarters of Libya's National Oil Corporation. Reuters
The headquarters of Libya's National Oil Corporation. Reuters
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Libya Signs Exploration and Production Deal for Ghadames Basin with UCC Holding

The headquarters of Libya's National Oil Corporation. Reuters
The headquarters of Libya's National Oil Corporation. Reuters

Libya's National Oil Corporation signed an exploration and production sharing agreement for zone 47 in the Ghadames Basin with ⁠the Libyan Investment ⁠Authority and Qatari-based UCC Holding, Chairman Massoud Suleman ⁠said on Wednesday.

The partnership aims to boost oil output to about 80,000 barrels per day and use associated gas for ⁠power ⁠generation, with the investor funding the project in full.

Business

Alswaha at LEAP East: Saudi Arabia is Global Hub Connecting AI Ecosystem Between East, West

Minister of Communications and Information Technology Abdullah Alswaha. SPA
Minister of Communications and Information Technology Abdullah Alswaha. SPA
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Alswaha at LEAP East: Saudi Arabia is Global Hub Connecting AI Ecosystem Between East, West

Minister of Communications and Information Technology Abdullah Alswaha. SPA
Minister of Communications and Information Technology Abdullah Alswaha. SPA

Minister of Communications and Information Technology Abdullah Alswaha affirmed that under the Saudi leadership, the Kingdom is advancing toward building one of the world’s most accessible and AI-ready digital infrastructures, reinforcing its position as a trusted partner in enabling the digital economy and connecting the East and the West.

Speaking at the opening of LEAP East 2026 in Hong Kong, Alswaha noted that LEAP, which was launched in Riyadh five years ago, has evolved into a global technology movement that has generated a multiplier effect not only across the Kingdom and the region but around the world.

He added that LEAP’s expansion to the East reflects the region’s growing importance as a global hub for shaping the future of technology and artificial intelligence.

The minister highlighted that the East today represents a $34 trillion economy, accounting for nearly 30% of global GDP, with a $10 trillion digital economy and a population of 3.7 billion people, representing approximately 46% of the world’s population.

He emphasized that the East offers not only scale but is also building the very foundation of the artificial intelligence age.

He further noted that 82% of the world’s AI patents originate from the East, while the region accounts for 60% of the global semiconductor market and 90% of advanced chip manufacturing, making it a global powerhouse for computing and artificial intelligence.

Alswaha also highlighted Saudi Arabia’s achievements over the past several years, noting that the Kingdom’s digital economy has grown by 75% in the past eight years to reach $139 billion.

The contribution of the non-oil digital economy to GDP has increased to 16%, while the Kingdom’s operational data center capacity has reached 467 MW, representing 47% of the total data center capacity across the Middle East and North Africa.

He emphasized that the empowerment of Saudi women represents one of the Kingdom’s greatest global success stories.

Women’s participation in the ICT workforce has increased from 7% to 35%, surpassing the averages of both the European Union and Silicon Valley, while Saudi women now rank among the world’s leaders in AI participation and empowerment.

On digital infrastructure, Alswaha emphasized that Saudi Arabia is building 6.9 GW of data center capacity by 2034, including 3 GW by 2030, supported by 12.8 GW of available power capacity today.

This positions the Kingdom among the fastest countries globally in providing power for computing and AI infrastructure projects.

The minister stated that Saudi Arabia brings together the three essential pillars for success in the AI era—compute, customers, and capital—adding that leading global companies from the East have already begun investing and expanding in the Kingdom, including ByteDance, Lenovo, and Tencent.