ICT Sector Could Contribute $53 Bln to Saudi GDP in 2022

The ICT sector’s contribution to the Kingdom’s GDP in Q1 2021 reached 5.48%. (Asharq Al-Awsat)
The ICT sector’s contribution to the Kingdom’s GDP in Q1 2021 reached 5.48%. (Asharq Al-Awsat)
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ICT Sector Could Contribute $53 Bln to Saudi GDP in 2022

The ICT sector’s contribution to the Kingdom’s GDP in Q1 2021 reached 5.48%. (Asharq Al-Awsat)
The ICT sector’s contribution to the Kingdom’s GDP in Q1 2021 reached 5.48%. (Asharq Al-Awsat)

The information and communication technology (ICT) sector’s contribution to the Saudi GDP reached SAR 146.9 billion ($39 billion) during the past year, with predictions it could reach SAR 200 billion ($53 billion) in 2022, a recent report revealed.

Published by the Research and Information Center of the Chamber of Commerce and Industry in Riyadh, the report revealed that the ICT sector’s contribution to the Kingdom’s GDP in Q1 2021 reached 5.48%.

Moreover, the report shed light on the digital economy’s contribution to global GDP, which amounted to about 15.5%, including the most important investment opportunities provided by the sector in the fields of e-commerce, tourism, smart cities, education, human capital and innovation.

The report emphasized that Saudi Arabia has a strong digital infrastructure. It stressed that the Kingdom has accelerated its process of digital transformation, which contributed to facing crises that disrupt all services in the public and private sectors.

Infrastructure readiness also contributed to the continuity of business, education and all the requirements of the daily life of citizens and residents in light of the coronavirus pandemic, ranking the Kingdom among the top 10 developed countries in the world due to its robustness in digital infrastructure, the report added.

It said the Ministry of Communications and Information Technology aims to raise the digital economy’s contribution to the GDP in the coming years to more than 19 %, compared to 5.48 % in 2021.

Saudi Arabia has witnessed clear steps in the efforts to expand its economic base and keep pace with the qualitative transformations driven by digital acceleration around the world, added the report.

It made several recommendations to achieve the Kingdom's goals in the digital economy during the next stage.

Most notably, it recommended providing safer applications to protect customer data, paying attention to technical education in the field of networks and cybersecurity, as well as establishing electronic industries inside Saudi Arabia to keep pace with global technology, reduce import costs and create job opportunities.



4 Factors Behind the Decline of Saudi Stock Market in H1 2025

Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
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4 Factors Behind the Decline of Saudi Stock Market in H1 2025

Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 

Financial analysts and market specialists have identified four main factors driving the decline of the Saudi stock market during the first half of 2025. Speaking to Asharq Al-Awsat, they pointed to heightened geopolitical tensions in the region, ongoing trade disputes and tariffs between the United States, China, and Europe, oil price volatility, and persistently high interest rates. Collectively, these pressures have squeezed liquidity and weighed heavily on market performance.

Despite the downturn, analysts expect the market to gradually recover over the second half of the year, supported by potential global interest rate cuts, stabilizing oil prices, easing economic uncertainty, and forecasts of robust growth in Saudi Arabia’s GDP and the non-oil sector, alongside continued government spending on major projects.

The Saudi stock market recorded notable losses in the first six months of 2025, with the benchmark index retreating 7.25%, shedding 872 points to close at 11,163, compared to 12,036 at the end of 2024. Market capitalization plunged by around $266 billion (SAR 1.07 trillion), bringing the total value of listed shares to SAR 9.1 trillion.

Seventeen sectors posted declines during this period, led by utilities, which plummeted nearly 32%. The energy sector fell 13%, and basic materials dropped 8%. In contrast, telecom stocks advanced around 7%, while the banking sector eked out a marginal 0.05% gain.

Dr. Suleiman Al-Humaid Al-Khalidi, a financial analyst and member of the Saudi Economic Association, described the first-half performance as marked by significant swings. “The index rose to 12,500 points, only to lose nearly 2,000 points before recovering to about 11,260,” he said.

He attributed the volatility to several factors: regional geopolitical strains, oil prices dipping to $56 a barrel, and high interest rates, which constrained liquidity. He noted that financing costs for traders now range between 7.5% and 9%, historically elevated levels.

“The Saudi market posted the steepest decline among regional exchanges despite record banking sector profits, which failed to translate into stronger overall index performance,” he observed.

Looking ahead, Al-Khalidi anticipates three interest rate cuts totaling 0.75 percentage points by next year, which would bring rates down to about 3.75%. “That should encourage a recovery in trading activity, improve liquidity, and support an upward trend in the index toward 12,000 points, potentially reaching 13,500 if momentum builds,” he added.

Meanwhile, Mohamed Hamdy Omar, economic analyst and CEO of G-World, described the downturn as largely expected, citing external pressures and prolonged trade tensions between the US, China, and Europe. “Retaliatory tariffs dampened investor confidence globally, and Saudi Arabia was no exception,” he said.

Lower oil revenues also strained state finances, leading to a budget deficit of SAR 58.7 billion in the first quarter, further tightening liquidity. Trading volumes fell over 30% year-on-year.

Omar pointed out that changes to land tax regulations and heightened regional security risks also weighed on sentiment. Nonetheless, he expects gradual improvement in the second half of 2025, driven by anticipated rate cuts, rebounding oil prices, and continued large-scale public investments.

He stressed the need for vigilance: “Saudi Arabia remains among the most stable markets, thanks to proactive regulation and policies designed to attract foreign capital and bolster investor confidence.”