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Saudi Arabia’s Non-oil Activity Rises to Highest Level in 8 Years

Non-oil activity increased due to a strong rise in demand and a positive economic outlook. (Asharq Al-Awsat)
Non-oil activity increased due to a strong rise in demand and a positive economic outlook. (Asharq Al-Awsat)
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Saudi Arabia’s Non-oil Activity Rises to Highest Level in 8 Years

Non-oil activity increased due to a strong rise in demand and a positive economic outlook. (Asharq Al-Awsat)
Non-oil activity increased due to a strong rise in demand and a positive economic outlook. (Asharq Al-Awsat)

Non-oil private business activity in Saudi Arabia rose to an 8-year high in February, supported by a strong increase in demand and a positive economic outlook. The Kingdom’s Purchasing Managers Index hit 59.8, up from 58.2 in January, at the fastest rate of increase since March 2015.

Sunday’s survey showed that the large rise in new orders indicates an improvement in the economic conditions of companies. The new orders sub-index rose to 68.7 last month, the highest reading in more than eight years, from 65.3 in January, extending a recent upward trend and building strong demand momentum.

As a result, the output sub-index registered a strong increase, reaching 65.6 in February from 63.6 in the previous month, which led to further expansion in hiring and purchasing.

Naif Alghaith, chief economist at Riyad Bank, said that despite the tightening of monetary conditions, the balance of supply and demand seemed strong and driven by ongoing projects across the Kingdom, which led to a sharp rise in production and new orders for companies, in addition to an increase in the demand for labor.

However, the strong improvement in demand in February has pushed inflationary pressures higher.

“Prices have responded to the surge in demand, with the increase in input costs evident especially in the services and construction sectors. To that end, we maintain our inflation forecast just below 3 percent, amid the ongoing cost pressures and the current elevated demand that we believe will continue in the medium term,” Alghaith noted.

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Egypt Makes Progress in its Nuclear Energy Project

Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
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Egypt Makes Progress in its Nuclear Energy Project

Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)
Construction work at the El-Dabaa nuclear power plant. (Egyptian Nuclear Power Plants Authority)

Egypt has reported significant progress in the construction of the El-Dabaa nuclear power plant in the country’s northwest, a project being developed in cooperation with Russia. The government announced on Tuesday that more than 20% of the project has been completed.

Egypt and Russia signed a cooperation agreement on November 19, 2015, to establish the nuclear power station at a cost of $25 billion, funded through a Russian government loan. The final agreements for El-Dabaa were signed in December 2017.

The plant will consist of four nuclear reactors with a total generation capacity of 4,800 megawatts, each producing 1,200 megawatts. The first reactor is scheduled to begin operations in 2028, with the remaining units coming online gradually as part of Egypt’s energy mix.

In its quarterly performance report, the Egyptian government stated that the project aligns with efforts to expand the peaceful use of nuclear energy within the national power grid.

President Abdel Fattah al-Sisi emphasized in November the importance of executing energy projects efficiently and on schedule, calling them a pillar of Egypt’s development strategy. He underscored the need to adhere to the project timeline while ensuring the highest standards of execution and workforce training.

Also in November, Prime Minister Mostafa Madbouly reaffirmed Egypt’s commitment to the project, stating that El-Dabaa would enhance renewable energy capacity and stabilize the national power grid.

In early March, Russia’s Atomstroyexport announced that construction on the second reactor at El-Dabaa had progressed ahead of schedule. According to the Egyptian Nuclear Power Plants Authority, the second tier of the inner containment structure had been installed at the reactor building.

Egypt experienced widespread power outages last summer, which ended in late July after securing sufficient fuel supplies for its power plants.

The El-Dabaa project is part of Egypt’s strategy to diversify its energy sources, generate electricity to meet domestic demand, and reduce reliance on imported gas and other fuels.

On Tuesday, the government also announced an additional 200 megawatts of private-sector solar power capacity as part of its efforts to expand renewable energy. Officials said the move would support energy diversification and advance the country’s sustainable development strategy.