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Saudi Govt. to Pay Private Sector its Dues in 60 Days

Cars drive past the King Abdullah Financial District in Riyadh, Saudi Arabia December 18, 2018. (Reuters)
Cars drive past the King Abdullah Financial District in Riyadh, Saudi Arabia December 18, 2018. (Reuters)
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Saudi Govt. to Pay Private Sector its Dues in 60 Days

Cars drive past the King Abdullah Financial District in Riyadh, Saudi Arabia December 18, 2018. (Reuters)
Cars drive past the King Abdullah Financial District in Riyadh, Saudi Arabia December 18, 2018. (Reuters)

The Saudi Ministry of Finance confirmed that the government remains committed to paying all the contracts signed with the private sector within a period of 60 days.

The move aims to spur private sector investment in the local domestic product.

The ministry said, 99 percent of submitted payment orders received by the ministry have been completed within the previously announced 60 days. Of those who have been paid, 97 percent were completed within 30 days.

The remaining less than 1 percent were not paid due to court orders.

There is a small percentage of disputed amounts claimed by certain vendors and contractors, which are subject to an agreed dispute resolution mechanism as per the contracts.

These developments coincide with a huge rise in spending in line with Saudi Vision 2030 and related national programs.

The Saudi government had approved the largest budget in the Kingdom’s history with estimated spending at SAR1,106 billion (USD295 billion), an increase of 7 percent compared to the end of the fiscal year 2018.

Revenues are estimated at SAR975 billion (USD260 billion), a rise of 9 percent compared to the same period.

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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.