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Total Value of Awarded Contracts in Saudi Arabia Reaches $12 Billion in Q1

Buildings are seen in Riyadh, Saudi Arabia. (File Photo: Reuters)
Buildings are seen in Riyadh, Saudi Arabia. (File Photo: Reuters)
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Total Value of Awarded Contracts in Saudi Arabia Reaches $12 Billion in Q1

Buildings are seen in Riyadh, Saudi Arabia. (File Photo: Reuters)
Buildings are seen in Riyadh, Saudi Arabia. (File Photo: Reuters)

The total value of awarded contracts across Saudi Arabia for Q1 in 2020 reached $12 billion, with a 28 percent quarter-on-quarter growth despite the repercussions of the coronavirus pandemic, according to a report by the US Saudi Business Council (USSBC).

The awarded contracts included numerous mega-projects across several sectors, with the military sector gaining $4 billion deals followed by oil and gas with $3 billion and petrochemicals ($2.2 billion).

These three sectors accounted for 76 percent of all awarded contracts alone, while the other contributing sectors included water, power, and real estate.

According to the report, it seems that Saudi Aramco is ready to continue awarding giant contracts in the oil and gas sector despite the impact of the COVID-19 on the economy.

Aramco goes ahead with its efforts to expand the Kingdom's capabilities in extracting hydrocarbons to meet local and global demand.

The experts also noted that the government capital spending during the first quarter of 2020 is a strong indicator of the strength of the construction sector.

When compared to the same period in 2019, the value of the contracts is down by 8 percent.

USSBC Member al-Baraa al-Wazir told Asharq Al-Awsat that the Kingdom began easing the measures imposed during the lockdown and opened shopping centers and resumed domestic flights as of the end of May.

Wazir indicated that these measures will lead to the gradual recovery of the economy, expecting Aramco to award a number of contracts in al-Ghawar southern field during the second quarter.

He also predicted that the Saudi National Water Company will award a major project contract in the industrial city of Jubail.

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Russia's Central Bank Holds Off on Interest Rate Hike

People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
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Russia's Central Bank Holds Off on Interest Rate Hike

People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)

Russia's central bank has left its benchmark interest rate at 21%, holding off on further increases as it struggles to snuff out inflation fueled by the government's spending on the war against Ukraine.
The decision comes amid criticism from influential business figures, including tycoons close to the Kremlin, that high rates are putting the brakes on business activity and the economy.
According to The Associated Press, the central bank said in a statement that credit conditions had tightened “more than envisaged” by the October rate hike that brought the benchmark to its current record level.
The bank said it would assess the need for any future increases at its next meeting and that inflation was expected to fall to an annual 4% next year from its current 9.5%
Factories are running three shifts making everything from vehicles to clothing for the military, while a labor shortage is driving up wages and fat enlistment bonuses are putting more rubles in people's bank accounts to spend. All that is driving up prices.
On top of that, the weakening Russian ruble raises the prices of imported goods like cars and consumer electronics from China, which has become Russia's biggest trade partner since Western sanctions disrupted economic relations with Europe and the US.
High rates can dampen inflation but also make it more expensive for businesses to get the credit they need to operate and invest.
Critics of the central bank rates and its Governor Elvira Nabiullina have included Sergei Chemezov, the head of state-controlled defense and technology conglomerate Rostec, and steel magnate Alexei Mordashov.
Russian President Vladimir Putin opened his annual news conference on Thursday by saying the economy is on track to grow by nearly 4% this year and that while inflation is “an alarming sign," wages have risen at the same rate and that "on the whole, this situation is stable and secure.”
He acknowledged there had been criticism of the central bank, saying that “some experts believe that the Central Bank could have been more effective and could have started using certain instruments earlier.”
Nabiullina said in November that while the economy is growing, “the rise in prices for the vast majority of goods and services shows that demand is outrunning the expansion of economic capacity and the economy’s potential.”
Russia's military spending is enabled by oil exports, which have shifted from Europe to new customers in India and China who aren't observing sanctions such as a $60 per barrel price cap on Russian oil sales.