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Saudi Arabia Makes Great Strides in Global Logistics Services

Saudi Arabia has recently witnessed significant development in the logistics services industry (Asharq Al-Awsat)
Saudi Arabia has recently witnessed significant development in the logistics services industry (Asharq Al-Awsat)
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Saudi Arabia Makes Great Strides in Global Logistics Services

Saudi Arabia has recently witnessed significant development in the logistics services industry (Asharq Al-Awsat)
Saudi Arabia has recently witnessed significant development in the logistics services industry (Asharq Al-Awsat)

Saudi Arabia has jumped 17 ranks in the World Bank’ Logistics Performance Index (LPI) 2023, which allows it to attract more investments, and increase the volume of exports, imports, and international trade, experts told Asharq Al-Awsat.

The Kingdom’s progress in the international index came after achieving large leaps in several indicators, namely: logistical efficiency, tracking and tracing, timing, customs, infrastructure, and maritime freight.

Nashmi Al-Harbi, a logistics expert, told Asharq Al-Awsat that with unlimited empowerment and support from the government, Saudi Arabia will be able to reach the top ten positions, based on its development of the basic pillars of the LPI, namely: customs and ease of procedures, diversity, and transportation means, as well as facilities infrastructure, such as ports, airports, railways and land lines.

He also pointed to the initiatives recently launched by Crown Prince Mohammad bin Salman, including the establishment of four economic zones that are aimed at attracting major foreign investments and companies and creating many job and commercial opportunities for the local market.

For his part, Economist Nasser Al-Qarawi told Asharq Al-Awsat that the Kingdom’s jump in the LPI came as a result of a national strategic plan that seeks to transform the Kingdom into an international logistical business hub.

Saudi Arabia launched the National Strategy for Transport and Logistics Services, with the aim of increasing the sector’s contribution to the national GDP from 6 to 10 percent by 2030.

Minister of Transport and Logistic Services Eng. Saleh Bin Nasser Al-Jasser announced last week that Saudi Arabia has jumped 17 ranks in the World Bank’ Logistics Performance Index.

This jump was achieved within the support and empowerment of Crown Prince and Prime Minister Mohammed bin Salman, the minister said, adding that the system will continue, through the directives of Saudi Arabia’s leadership, to move forward to consolidate the Kingdom’s position as a global logistic hub, in accordance with the national strategy for transportation and logistics services.

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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.