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Saudi Arabia Seeks Promising Local Content Opportunities

Session at the Local Content Forum in Riyadh (Asharq Al-Awsat)
Session at the Local Content Forum in Riyadh (Asharq Al-Awsat)
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Saudi Arabia Seeks Promising Local Content Opportunities

Session at the Local Content Forum in Riyadh (Asharq Al-Awsat)
Session at the Local Content Forum in Riyadh (Asharq Al-Awsat)

Saudi Arabia is pushing towards activating local content in the national industry, specifically in promising sectors.

The Minister of Industry and Mineral Resources, Bandar Ibrahim AlKhorayef, met Tuesday with 20 prominent local and international companies to discuss promising local content opportunities and cooperation between the firms and Government Procurement Authority.

The meeting also addressed the role of the private sector in directing its spending toward local content and the companies' efforts in developing content in several key industries.

Procurement Tools

AlKhorayef stressed that local content has several tools in government procurement that push demand toward local manufacturers and suppliers and help the private sector seize promising investment opportunities.

He noted that industry localization and knowledge transfer pave the way for investors to localize new products.

The Kingdom has promising opportunities to maximize interest by taking advantage of the purchasing power of state-owned companies, especially after the Cabinet decided to compel these companies to prioritize local content.

Content Preference

During the meeting, Khorayef called on the private sector to be equally responsible by prioritizing local content and products in its purchases and projects, identifying localization opportunities in its supply chains, and presenting them to small and medium enterprises (SMEs).

Promising sectors

In a panel entitled "Promising Sectors and Opportunities," the Local Content Forum discussed the role of entrepreneurs in developing local content, products, and services and the importance of research and innovation in enabling local content opportunities.

The executive vice president of operations at the Local Content and Government Procurement Authority Mohammad al-Qahtani and Executive Vice President for Studies at the Industrial Development Fund Ahmed al-Baqawi attended the session.

The session also included Deputy Governor for Entrepreneurship at the General Authority for Small and Medium Enterprises (Monshaat) Saud al-Sabhan and Supervisor of the Localization, Local Content, Risk Management Department at the Ministry of Energy Fouad Moussa.

The participants emphasized that local content highlights the promising sectors and opportunities for entrepreneurs in developing and providing investment opportunities.

Qahtani explained that the Authority is working on several strategic and vital sectors full of promising opportunities to develop local content.

Purchasing power

Qahtani indicated that the Authority targets opportunities to develop local content in several sectors and directs the government's purchasing power toward local content.

The Authority developed many mechanisms and legislation to seize opportunities, including one for government procurement, which compels contractors to deal with government agencies to provide national products from local factories.

He stated that since the activation of the mechanism, the Authority has launched several lists of over eight different sectors and more than 400 other products from national factories. The list continues to be developed and updated.

Small and medium enterprises

Meanwhile, Sabhan explained that SMEs constitute 99.3 percent of the manufacturing activity that contributes to localization.

He noted that local content in the government competition and procurement system directly supports and empowers SMEs, recalling that government purchases in Saudi Arabia increased 26.6 percent until the end of the third quarter of 2021, compared to 24.9 percent in 2019.

He explained that Monshaat launched a service to transform over 3,000 small and medium enterprises and had a role in increasing the local content.

Monshaat seeks to enhance the contribution of SMEs in local content by increasing the opportunities for their participation in the commercial franchise to expand their activities.

Entrepreneurs

Executive Vice President for Studies at the Industrial Development Fund Ahmed al-Baqawi stated that the Fund supports the client and the private sector to advance the Kingdom under Vision 2030.

Baqawi explained that young men and women at the Fund provide appropriate advice to the investor, pointing out that the Fund is a forum for all entrepreneurs in various fields.

Risk management

Meanwhile, Ministry of Energy official Fouad Moussa explained that the energy sector has a significant impact on the economy in the Kingdom.

Energy represents 45 percent of capital and operational spending and provides excellent opportunities for the products used in the energy, petroleum, gas, petrochemical, and electricity production sectors.

Moussa indicated that Saudi Arabia is heading to become the largest producer of hydrogen, which will become the future fuel.

He indicated that the Ministry had set new targets to localize the main products used directly in capital and operational spending and seeks to use available resources to serve the energy sector, ensuring it becomes parallel to other industries.

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Business

Saudi Economy Accelerates as Diversification and Legal Reforms Drive Growth

Quality of life represents a strategic national priority in Saudi Arabia (SPA). 
Quality of life represents a strategic national priority in Saudi Arabia (SPA). 
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Saudi Economy Accelerates as Diversification and Legal Reforms Drive Growth

Quality of life represents a strategic national priority in Saudi Arabia (SPA). 
Quality of life represents a strategic national priority in Saudi Arabia (SPA). 

Saudi Arabia’s economy has undergone nearly a decade of transformation under Crown Prince Mohammed bin Salman, as sweeping reforms and diversification efforts reshape the country’s economic landscape.

Since the launch of Saudi Vision 2030 in April 2016, the Kingdom has embarked on its most significant economic shift in decades. The transformation has extended far beyond fiscal adjustments or limited diversification programs, evolving instead into a broad structural reform aimed at reducing reliance on oil and building a more diverse and dynamic economy.

Economic indicators suggest the strategy is gaining traction. Saudi Arabia’s gross domestic product (GDP) rose from about SAR 2.6 trillion in 2016 to nearly SAR 4.7 trillion in recent years, roughly $1.3 trillion, according to the latest official figures. That represents an average cumulative annual growth rate of about 8 percent, placing the Kingdom among the fastest-growing major economies globally during this period.

The shift reflects Vision 2030’s broader strategy to expand non-oil industries and widen the country’s production base beyond hydrocarbons.

 

Faisal Al-Fadhel, a legal expert in economic legislation and a member of the board of trustees of the Riyadh Economic Forum, said the reforms launched under Crown Prince Mohammed bin Salman have introduced a more diversified and sustainable economic model.

“Saudi Arabia has moved toward reducing its dependence on oil while expanding promising sectors such as tourism, technology, logistics and advanced industries,” Al-Fadhel told Asharq Al-Awsat. “This approach enhances the resilience of the national economy and increases the attractiveness of the Saudi market for both domestic and foreign investors.”

Recent economic indicators support that assessment. Non-oil activities have recorded strong growth, the private sector’s contribution to GDP has expanded, and foreign direct investment inflows have increased. At the same time, Saudi Arabia has improved its standing in global competitiveness indicators, reinforcing its ambitions to become a regional hub for business and investment.

Al-Fadhel noted that the transformation has also been supported by a broad legislative reform agenda designed to modernize the regulatory environment. Key economic and commercial laws — including the Companies Law, Investment Law, and Bankruptcy Law — have been updated, alongside regulations related to corporate governance, investor protection and competition. The reforms aim to improve transparency, regulatory certainty and the efficiency of the investment environment.

Non-Oil Sectors Lead Growth

One of the most visible outcomes of the economic shift is the rising contribution of non-oil sectors, which now account for 56 percent of GDP. Data show that non-oil activities were the primary driver of real economic growth in 2025.

Saudi Arabia ended 2025 with its strongest growth in two years, with GDP expanding 4.5 percent, according to estimates by the General Authority for Statistics (GASTAT). The economy grew 5 percent in the fourth quarter, with all major sectors contributing to the expansion compared with 2024.

Labor Market Changes

The Saudi labor market has also seen notable shifts. Unemployment among Saudi nationals has declined, while female participation in the workforce has reached record levels following a series of labor and regulatory reforms.

More than 2.48 million Saudis have joined the private sector in recent years, reflecting the impact of job localization policies. Economic transformation programs have also generated roughly 800,000 new jobs, with strong growth in engineering professions.

Employment opportunities have expanded particularly in tourism, supported by major entertainment and tourism projects, as well as in the pharmaceutical and medical manufacturing industries, where job numbers have doubled.

Investment at the Center

Investment has become a central pillar of the Kingdom’s economic strategy. Crown Prince Mohammed bin Salman has positioned both domestic and foreign investment as key drivers of growth and diversification.

The government established the Ministry of Investment and launched the National Investment Strategy as a comprehensive framework to boost capital formation. Total investment — measured by fixed capital formation — has risen from about SAR 672 billion in 2017 to roughly SAR 1.44 trillion by the end of 2024, more than doubling in less than a decade.

Al-Fadhel emphasized that the private sector is a critical partner in achieving Vision 2030 goals through expanded investment, technological adoption, innovation, and entrepreneurship.

Public Investment Fund Expands Role

The Public Investment Fund (PIF) has emerged as a central instrument of the transformation. With assets estimated at SAR 3.47 trillion, it has become one of the world’s largest sovereign wealth funds.

PIF is leading major investments in tourism, renewable energy, industry, technology and entertainment while launching large-scale development projects designed to create new industries and strengthen Saudi Arabia’s position as a global economic hub.

 

 

Business

US Fed Expected to Hold Rates Steady as Iran War Roils Outlook

The US-Israel war on Iran has seen energy infrastructure damaged across the Middle East, sending shockwaves through global markets. AFP
The US-Israel war on Iran has seen energy infrastructure damaged across the Middle East, sending shockwaves through global markets. AFP
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US Fed Expected to Hold Rates Steady as Iran War Roils Outlook

The US-Israel war on Iran has seen energy infrastructure damaged across the Middle East, sending shockwaves through global markets. AFP
The US-Israel war on Iran has seen energy infrastructure damaged across the Middle East, sending shockwaves through global markets. AFP

US Federal Reserve policymakers are expected to leave interest rates unchanged at their meeting next week, as the US-Israel war on Iran sends shock waves through markets and recent economic data has begun to show weakness.

The Fed will start its two-day meeting on Tuesday, with an announcement of the benchmark lending rate in the world's largest economy a day later.

The central bank cut rates three consecutive times last year before holding them steady at its January meeting, said AFP.

It has a dual mandate of holding inflation near a long-term target of two percent while ensuring maximum employment.

With war in the Middle East causing global oil prices to spike, potentially increasing overall inflation and curbing growth, analysts say policymakers are unlikely to make any moves now.

"This is certainly a bind for the Fed, because supply shocks are extremely hard to deal with in that they lift inflation and they curb output," EY-Parthenon chief economist Gregory Daco told AFP.

Affordability is a key political issue for President Donald Trump, who has claimed that prices are cooling even as consumers complain of the high costs of basic goods.

Trump has repeatedly insulted Fed Chair Jerome Powell as he demands lower rates, and the Justice Department threatened Powell with a criminal indictment as part of an investigation into cost overruns for a Fed renovation project.

While consumer inflation has dropped from a peak of 9.1 percent during the Covid pandemic, it remains well above the Fed's two- percent target.

"Unlike other countries, which have already achieved some level of price stability, we're five years in without price stability," said Diane Swonk, chief economist at KPMG.

She warned that, depending on how long the Iran war lasts, inflation could again soar past four percent.

"I think the main story here is that we are seeing inflation moving away from the Fed's two-percent target, and that will lead many Fed policymakers to adopt an even more hawkish stance," said Daco.

- Duelling mandates -

Raising rates to cool the economy, however, could bring the Fed into tension with its other mandate: managing unemployment.

The United States unexpectedly lost 92,000 jobs in February, government data showed, while the unemployment rate rose to 4.4 percent.

Analysts say a relatively steady unemployment rate has been masking churn beneath the surface.

Labor demand has been dropping, but unemployment has not spiked because that has been accompanied by a drop in supply due to Trump's immigration crackdown.

Daco said labor demand gauges were showing signs of concern, including a weak hiring rate "at a decade low," slowing wage growth and business leaders talking about labor replacement due to AI.

Swonk noted that spiking uncertainty due to war in Iran and its knock-on effects would further curb labor demand.

"Uncertainty acts as its own tax on the economy, and one of the first lines of defense that firms do is they freeze hiring," she said.

And recent data ahead of the Fed meeting is not encouraging, with US GDP growth revised sharply lower in the final months of 2025.

- 'Rock and a hard place' -

Some Fed policymakers, however, have been cautious in describing the possible inflationary shocks of the war.

Fed Governor Christopher Waller expressed sympathy on Bloomberg TV last week for consumers facing spiking gasoline prices.

"But for us thinking about policy going forward, this is unlikely to cause sustained inflation," he said.

Swonk warned however that any economic slowdown from the war could be tough to recover from in the immediate term.

"I think people are discounting the risk of the lingering effects," she said, noting that supply disruptions affect more than oil prices.

"There's no question they're between a rock and a hard spot, and it just got harder," Swonk said of policymakers having to balance inflation and unemployment.

To Daco, however, uncertainty means the Fed is more likely to hold rates steady "for a long period of time."

Traders have begun to reduce their outlook for rate cuts, and Swonk said that hikes could even be on the menu.

"This is not a one-way street. We're at a busy intersection, and the stoplight's broken," she said.

Business

Fitch Affirms ‘AA’ Credit Rating for Qatar

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
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Fitch Affirms ‘AA’ Credit Rating for Qatar

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)

Fitch Ratings affirmed Qatar's long-term foreign-currency rating at "AA" and a "stable" outlook on Friday, saying its strong balance sheet and plans to sharply increase LNG output should help cushion the impact of the escalating Middle East conflict.

The US-Israel war with Iran has disrupted shipments from the world's most important oil artery, the Strait of Hormuz, which is responsible for 20% of global oil and liquefied natural gas supply.

The impact on LNG exports is likely ⁠to widen Qatar's ⁠fiscal deficit in 2026, contingent on how long the conflict lasts, but the country should be able to more easily tap debt markets or draw on its sovereign wealth fund, the Qatar Investment Authority (QIA), which has built up ⁠assets over decades of investing at home and globally.

Fitch said it assumes the conflict would last less than a month and the strait would remain closed during that period, with no major damage to regional hydrocarbon infrastructure. Under its baseline scenario, the agency expects Brent crude to average $70 a barrel in 2026.

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 and exceed 7% by 2030. Excluding investment income, the budget is expected to return to surplus from 2027, with most excess revenue likely to be transferred to QIA for overseas investment.

The agency expects Qatar to meet its 2026 funding needs through a combination of central bank overdrafts, domestic and international market borrowing, and drawdowns on the finance ministry's deposits in the banking sector.