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Saudi Arabia Signs $10.6 Bln Deal to Develop Local Infrastructure

Officials sign the agreement on Saturday. (Asharq Al-Awsat)
Officials sign the agreement on Saturday. (Asharq Al-Awsat)
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Saudi Arabia Signs $10.6 Bln Deal to Develop Local Infrastructure

Officials sign the agreement on Saturday. (Asharq Al-Awsat)
Officials sign the agreement on Saturday. (Asharq Al-Awsat)

Saudi Arabia will invest 40 billion riyals ($10.6 billion) in developing local infrastructure projects, announced the Ministry of Municipal and Rural Affairs and Housing.

Under the new agreement, nearly 90 million square meters will be allocated for the local infrastructure projects to provide over 150,000 housing units across 11 cities in an effort to accommodate around 750,000 people.

In addition, nearly 54 million square meters will be allocated for public areas, facilities, parks, road networks and public transport.

The agreement was signed on the sidelines of a housing exhibition organized by the Ministry of Municipal and Rural Affairs and Housing in Riyadh, under the patronage of Custodian of the Two Holy Mosques King Salman bin Abdulaziz.

The exhibition is set to run until September 28.

The deal was signed in the presence of Minister of Housing Majid al-Hogail, Minister of Tourism Ahmed bin Aqeel Al-Khateeb, Minister of Environment, Water and Agriculture Abdulrahman al-Fadley, and Minister of Transport and Logistics Services Saleh Al-Jasser.

The housing ministry was represented by Undersecretary for Real Estate Development Abdul Rahman bin Abdullah Al-Taweel, while the National Housing Company was represented by CEO of NHC Eng Mohammad bin Saleh Al-Bati.

The company is the leading enabler of the real estate development sector and the largest major developer of suburbs and residential communities, and aims to increase the real estate supply in the Kingdom with various housing options.

This comes as part of the company’s efforts to achieve the objectives of the housing program as part of the Kingdom’s Vision 2030, by raising the proportion of housing ownership for Saudi families to 70 percent.

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Saudi Arabia’s Private Sector Ends 2024 with Strongest Sales Growth

 The Saudi capital, Riyadh (AFP)
 The Saudi capital, Riyadh (AFP)
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Saudi Arabia’s Private Sector Ends 2024 with Strongest Sales Growth

 The Saudi capital, Riyadh (AFP)
 The Saudi capital, Riyadh (AFP)

Saudi Arabia’s non-oil private sector concluded 2024 on a high note, with significant increases in sales and business activity fueled by robust domestic and international demand.
The Kingdom’s non-oil GDP is expected to grow by over 4% in both 2024 and 2025, supported by notable improvements in business conditions, according to Riyad Bank’s Purchasing Managers’ Index (PMI) report.
Despite inflationary challenges, the Riyad Bank PMI recorded 58.4 points in December, reflecting strong and accelerated economic recovery, albeit slightly lower than November’s 59.0 points.
The solid performance highlights improvements across non-oil sectors, with new business activity in December growing at its fastest pace in 12 months. This growth reflects rising domestic and global demand. Renewed marketing efforts and strong customer demand encouraged companies to boost production and expand operations, particularly in wholesale and retail.
The PMI has remained above the neutral threshold of 50.0 points since September 2020, signaling continuous expansion in Saudi Arabia’s non-oil economic activity.
The International Monetary Fund (IMF) previously projected sustained momentum in Saudi Arabia’s non-oil reforms, estimating non-oil GDP growth for 2024 at between 3.9% and 4.4%. The IMF noted that growth could reach 8% if reform strategies are fully implemented.
Expansion in International Markets
A surge in exports was among the key factors driving non-oil economic growth in Saudi Arabia. December saw the largest increase in export orders in 17 months, underscoring the success of Saudi policies in opening new markets and fostering strong international trade relationships, supported by ongoing product innovation.
Higher domestic and international demand boosted production levels in December. Companies also worked to enhance operational efficiency, leading to a notable increase in inventory. Purchasing activity accelerated to its highest level in nine months, reflecting the sector’s ability to effectively meet rising demand.
Cost Pressures on Production
Despite significant growth in production and sales, the sector continues to face challenges related to sharp inflation in input costs, driven by heightened demand for raw materials. These pressures have led to higher product prices, although some companies opted to reduce prices to remain competitive and address elevated inventory levels.
Meanwhile, wage cost increases were less pronounced, helping mitigate economic pressures related to salaries.
Future Outlook
Dr. Naif Al-Ghaith, Chief Economist at Riyad Bank, highlighted the positive end to 2024 for the Kingdom’s non-oil private sector, reflecting the progress achieved under Saudi Arabia’s Vision 2030. He noted that the PMI score of 58.4 points demonstrates the sector’s resilience and ongoing expansion.
Al-Ghaith expects non-oil GDP to grow by over 4% in 2024 and 2025, driven by improved business conditions and rising new orders, signaling increased market confidence and demand. Elevated domestic demand and export growth have pushed total sales to their highest level in a year. This, in turn, has led to strong increases in business activity and inventory levels, demonstrating the sector’s ability to meet and capitalize on excess demand, he underlined.