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Saudi's Public Investment Fund Takes $11 Bln in its First Loan

Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
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Saudi's Public Investment Fund Takes $11 Bln in its First Loan

Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser

Saudi Arabia's sovereign wealth fund says it has taken its first loan, a $11 billion borrowing from global banks as it tries to expand its investments.

The Saudi Public Investment Fund made the announcement in a statement on Monday.

“This is the first step in incorporating loans and debt instruments into PIF’s long-term funding strategy,” the fund’s managing director Yasir al-Rumayyan said in a statement. He added that the PIF would “develop into one of the most prominent users of banking services in the region”.

The PIF, which is to play a leading role in Saudi Arabia’s drive to develop non-oil industries, said it would use the loan for “general corporate purposes”.

Saudi Crown Prince Mohammed bin Salman, Deputy Prime Minister and Minister of Defense, has talked about using the PIF to help diversify the economy of the Kingdom, which relies heavily on money made from its oil sales.

The PIF program outlines Saudi objectives in local and international investments that enable the diversification of the Kingdom’s sources of development and growth.

The three-year program (2018 until 2020) includes around 30 initiatives which set a goal to increase PIF's asset portfolio to SAR1.5 trillion ($400 billion) by 2020.

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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)

Saudi Arabia’s non-oil exports soared to a two-year high in May, reaching SAR 28.89 billion (USD 7.70 billion), marking an 8.2% year-on-year increase compared to May 2023.

On a monthly basis, non-oil exports surged by 26.93% from April.

This growth contributed to Saudi Arabia’s trade surplus, which recorded a year-on-year increase of 12.8%, reaching SAR 34.5 billion (USD 9.1 billion) in May, following 18 months of decline.

The enhancement of the non-oil private sector remains a key focus for Saudi Arabia as it continues its efforts to diversify its economy and reduce reliance on oil revenues.

In 2023, non-oil activities in Saudi Arabia contributed 50% to the country’s real GDP, the highest level ever recorded, according to the Ministry of Economy and Planning’s analysis of data from the General Authority for Statistics.

Saudi Finance Minister Mohammed Al-Jadaan emphasized at the “Future Investment Initiative” in October that the Kingdom is now prioritizing the development of the non-oil sector over GDP figures, in line with its Vision 2030 economic diversification plan.

A report by Moody’s highlighted Saudi Arabia’s extensive efforts to transform its economic structure, reduce dependency on oil, and boost non-oil sectors such as industry, tourism, and real estate.

The Saudi General Authority for Statistics’ monthly report on international trade noted a 5.8% growth in merchandise exports in May compared to the same period last year, driven by a 4.9% increase in oil exports, which totaled SAR 75.9 billion in May 2024.

The change reflects movements in global oil prices, while production levels remained steady at under 9 million barrels per day since the OPEC+ alliance began a voluntary reduction in crude supply to maintain prices. Production is set to gradually increase starting in early October.

On a monthly basis, merchandise exports rose by 3.3% from April to May, supported by a 26.9% increase in non-oil exports. This rise was bolstered by a surge in re-exports, which reached SAR 10.2 billion, the highest level for this category since 2017.

The share of oil exports in total exports declined to 72.4% in May from 73% in the same month last year.

Moreover, the value of re-exported goods increased by 33.9% during the same period.