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Saudi Arabia Gives Foreigners Opportunity to Invest in 4 New Sectors

Saudi Arabia Gives Foreigners Opportunity to Invest in 4 New Sectors
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Saudi Arabia Gives Foreigners Opportunity to Invest in 4 New Sectors

Saudi Arabia Gives Foreigners Opportunity to Invest in 4 New Sectors

Saudi Arabia decided to allow foreign investors to invest in several new sectors, including recruitment offices, audiovisual services, land transport, and real-estate brokerages.

The Cabinet amended in its weekly meeting on Tuesday what it described as a list of types of activity that had been previously excluded from foreign investment.

This vital decision reflects the growing inflow of foreign investments into the Saudi market.

This inflow in various fields is an important indicator of the extent to which foreign investors are keen to boost their investments in the local market, which has led the Kingdom to open for them more sectors.

The Kingdom is one of the world's most attractive countries for foreign investment nowadays while it also represents an important factor in the global economy.

The Saudi Arabian General Investment Authority’s (SAGIA) report for the Q3 of 2018 showed an increase in the number of licenses granted to foreign and local companies investing in Saudi Arabia by more than 90 percent compared with the same period in 2017.

SAGIA has granted 499 licenses until the end of the third quarter of this year.

Meanwhile, Moody’s Investor Service has affirmed the Kingdom’s A1 rating with a stable outlook.

It raised Saudi’s GDP growth forecasts for the period (2018-2019) to 2.5 percent and 2.7 percent respectively, instead of its previous expectations of 1.3 percent and 1.5 percent for the same period reported in April this year.

These revised numbers from Moody’s even exceed the forecasts announced by the government in the preliminary statement of the 2019 budget announcement on September 30, 2018.

On the other hand, Trade and Investment System has made progress in seven major indicators that are related to trade and investment in the Global Competitiveness Report 2018, which was issued by the World Economic Forum.

These include shareholder governance, companies adopting changing ideas, behavior towards entrepreneurial risks, small and medium enterprise (SME) financing, growth of innovative companies, multi-stakeholder collaboration, and strong audit and accounting standards.

The remarkable progress in the Global Competitiveness Report 2018 contributed to the Kingdom's best progress in six years, ranking 39 out of 140 registered countries with 67.5 points.

The Ministry of Commerce and Investment, in cooperation with the Capital Market Authority (CMA), made progress in the "shareholders' governance" index.

The Kingdom rose to the fifth rank in the world, ranking 72nd place after it ranked 77th globally last year, to rank first in the Arab world and second in the G20.

This progress comes as a result of actions aimed at improving and developing the investment environment and raising the attractiveness of the financial market.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."