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Value of Saudi Construction Projects Since 2016 Reaches $1.25 Trillion

Riyadh currently accounts for 18% of all ongoing real estate and development projects. (Asharq Al-Awsat)
Riyadh currently accounts for 18% of all ongoing real estate and development projects. (Asharq Al-Awsat)
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Value of Saudi Construction Projects Since 2016 Reaches $1.25 Trillion

Riyadh currently accounts for 18% of all ongoing real estate and development projects. (Asharq Al-Awsat)
Riyadh currently accounts for 18% of all ongoing real estate and development projects. (Asharq Al-Awsat)

The total value of real estate and infrastructure projects launched since the announcement of Saudi Arabia’s National Transformation Plan in 2016 has reached $1.25 trillion.

The value of implemented projects amounted to $250 billion, according to a report by the global real estate consulting company Knight Frank.

“Arguably one of, if not the most, expansive real estate development programs ever seen in the world is gathering pace in Saudi Arabia as the 2030 deadline nears to realize Vision 2030,” Faisal Durrani, partner and head of Mena research, said.

He noted that the volume of planned residential units has risen to 660,000 units, an increase of 30 percent in the last 12 months, adding that affordability remained a major obstacle for many buyers.

“Affordability is still a key hurdle for many buyers and so price points for the new inventory will be critical to reigniting domestic demand,” he stated.

In the commercial market, 5.3 million square meters of retail space is now planned, with a further 289,000 hotel rooms that “will go some way to supporting Saudi Arabia’s goal of hosting 100 million visitors by 2030”, according to Durrani.

The Knight Frank report analyzes the value of real estate and infrastructure projects in the western half of the country, Riyadh and the remaining provinces. Western Saudi remains a pivotal part of the Kingdom’s transformative vision, with $687 billion in real estate projects expected to be delivered by the end of the decade.

“The western half of the Kingdom contains the highest concentration of headline-grabbing projects in the country, including of course NEOM,” Harmen de Jong, partner and head of strategy, Saudi Arabia, at Knight Frank said.

He added that during the past year, authorities announced various sub-components in NEOM, including Trojena, the host location for the 2030 Asian Games, as well as Sindalah, a luxury island that will be the first of NEOM’s projects to materialize.

“NEOM overall is also progressing rapidly, with $70 billion of projects now awarded, 45 percent of which has been completed,” he remarked.

The transformation is “clearly visible across the entire urban landscape”, as the planned giga projects are set to vastly expand the residential, office, retail, hospitality and industrial offerings to accommodate the projected population growth to 50 million by 2030, the report said.

It noted that Riyadh currently accounts for 18 percent of all ongoing real estate and development projects, totaling about $229 billion. This includes plans for more than 241,000 apartments by 2030, as well as 3.6 million square meters of office space.

Knight Frank also highlights King Salman Park as one of the most advanced mega projects in the city, with contracts worth $8.8 billion awarded in the $9 billion development project as it approaches completion in 2027.

Health care and education

Away from the headlines of giga projects across the Kingdom, an increasing attention is focused on the well-being of Saudi Arabia’s residents, by the improvement of world-class urban environments, according to Knight Frank.

This includes Qiddiya’s recent plans to expand in Jeddah, with the $266 million Qiddiya Coast Theme Park, as well as the $500 million Riyadh Sports Boulevard, and the $23 billion Green Riyadh, which will transform the Saudi capital into a green city through the planting of 7.5 million trees.

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IMF: Saudi Transformation on Track Supported by Deeper Reforms

The Saudi capital, Riyadh (Reuters)
The Saudi capital, Riyadh (Reuters)
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IMF: Saudi Transformation on Track Supported by Deeper Reforms

The Saudi capital, Riyadh (Reuters)
The Saudi capital, Riyadh (Reuters)

Saudi Arabia enters a new phase described as one of the most sensitive and influential in the course of its economic transformation, according to the International Monetary Fund (IMF), which said next year will be pivotal for the Kingdom thanks to deeper reforms implemented throughout the past years.

In a “country focus” released last month, Amine Mati and Yuan “Monica” Gao Rollinson, both in the IMF’s Middle East and Central Asia Department, showed that growth in Saudi Arabia has been fueled not only by investment, but also by people as private sector job creation has surged, particularly among women while unemployment rates reached record-lows.

The two economists said the resilience shown in 2025 underscores the progress already achieved in reducing the economy’s exposure to oil fluctuations.

They said that despite oil prices falling nearly 30% below their 2022 peak, the non-oil economy maintained strong momentum.

“This strength reflects the impact of Saudi Vision 2030 reforms—diversification gaps with emerging markets have narrowed, and the business environment now rivals that of advanced economies,” the two IMF experts said.

At the same time, Saudi Arabia is strategically shifting some of its spending priorities, with some of its investment focus moving toward AI and advanced technologies as part of its broader effort to diversify the economy.

The IMF paper said deeper reforms—including the steadfast implementation of recently enacted laws that ease access for foreign investors— will help foster an investor-friendly business environment and attract more private investment.

At the banking sector, it noted that the Saudi Central Bank’s continued vigilance in monitoring emerging risks will be critical in preventing vulnerabilities from building up.

“As conditions evolve, the central bank should continue to proactively deploy prudential measures to keep the financial system resilient,” it said.

Over time, deepening capital markets—so that companies can raise more financing through bonds and equity—will help ease pressure on banks, facilitate credit for small and medium enterprises, and create a more balanced mix of funding for the economy.

Looking ahead, Saudi Arabia faces a new test: how to sustain reform momentum in an era of potentially lower oil revenues without slipping back into the stop-and-go cycles that followed past oil booms, the two IMF economists said.

They said fortunately, Saudi Arabia approaches this challenge from a position of relative strength thanks to public debt-to-GDP ratios that remain low while foreign assets are still ample.

At the same time, the IMF noted that the sustainability of such progress relies on Saudi Arabia’s ability to anchor spending decisions within a consistent, multi-year framework will be vital for maintaining long-term sustainability.

The Fund showed that sustaining Saudi Arabia’s growth momentum will increasingly depend on two engines: a skilled workforce and a vibrant private sector.

Deeper reforms—including the steadfast implementation of recently enacted laws that ease access for foreign investors— will help foster an investor-friendly business environment and attract more private investment.

“The sovereign wealth fund can act as a complementary catalyst here by spurring new projects and partnerships, while making sure it leaves ample room for both domestic and international private investors to thrive,” the IMF paper noted.

Last October, the IMF had raised Saudi Arabia's economic growth forecast to 4% for 2026, supported by the expansion of non-oil activities and higher oil prices.

Meanwhile, the Saudi Finance Ministry forecasted real GDP growth of 4.6% in 2026, driven by non-oil activities and private-sector leadership.

Business

Iraq’s Oil Minister Says Talks Ongoing with Chevron on West Qurna 2 Oilfield

A Chevron logo at the Chevron building in Houston, Texas, US August 19, 2025. (Reuters)
A Chevron logo at the Chevron building in Houston, Texas, US August 19, 2025. (Reuters)
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Iraq’s Oil Minister Says Talks Ongoing with Chevron on West Qurna 2 Oilfield

A Chevron logo at the Chevron building in Houston, Texas, US August 19, 2025. (Reuters)
A Chevron logo at the Chevron building in Houston, Texas, US August 19, 2025. (Reuters)

Iraq's oil minister said on Saturday that talks were ‌ongoing ‌with ‌US ⁠major Chevron regarding ‌the Lukoil-operated West Qurna-2 field, the Russian company's ⁠largest foreign ‌asset.

Chevron ‍and ‍Exxon Mobil ‍are among potential bidders for Lukoil's overseas assets following US ⁠sanctions on the Russian oil producer.

Business

China’s Consumer Inflation Scales 3-Year High but Deflation Battle Far from Over

Chinese girls dressed in Qing Dynasty attire take pictures outside the Forbidden City in Beijing, China, Wednesday, Jan. 7, 2026. (AP)
Chinese girls dressed in Qing Dynasty attire take pictures outside the Forbidden City in Beijing, China, Wednesday, Jan. 7, 2026. (AP)
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China’s Consumer Inflation Scales 3-Year High but Deflation Battle Far from Over

Chinese girls dressed in Qing Dynasty attire take pictures outside the Forbidden City in Beijing, China, Wednesday, Jan. 7, 2026. (AP)
Chinese girls dressed in Qing Dynasty attire take pictures outside the Forbidden City in Beijing, China, Wednesday, Jan. 7, 2026. (AP)

China's annual consumer price inflation accelerated to a 34-month high in December, but the full-year rate slumped to the lowest in 16 years while producer deflation persisted, backing market expectations for more stimulus to shore up soft demand.

Imbalances in the $19 trillion economy have worsened over the past year even as growth is on course to meet Beijing's target of "around 5%" for 2025, buoyed by policy support and resilient goods exports.

US President Donald Trump's global trade war has added to persistently soft consumer demand, which has remained a drag on confidence and growth for years amid a prolonged property crisis.

The December consumer price index (CPI) rose 0.8% from the same month in 2024, National Bureau of Statistics (NBS) data showed on Friday, matching expectations in a Reuters poll and perking up from the 0.7% increase in November.

The rise was mainly driven by food prices, especially those of fresh vegetables and beef, which expanded 18.2% ‌and 6.9% respectively, Dong ‌Lijuan, a statistician at NBS, said in a statement. Pre-New Year holiday shopping ‌and ⁠supportive policies also helped ‌boost consumer prices, Dong added.

Chinese policymakers have repeatedly pledged to support a rebound in prices with monetary policy and have cracked down on excessive competition. They have also vowed to boost people's income to unleash consumption potential and better align the country's supply and demand.

Yet, the underlying demand impulse in the economy remains weak.

"Despite expectations of a recovery, inflation remains relatively low and should not preclude further monetary easing this year," said Lynn Song, ING's chief economist for Greater China.

Zichun Huang, China economist at Capital Economics, said the elevated headline CPI was not due to the government campaign to curb so-called "involution", adding that overcapacity and deflationary pressures will persist in the coming ⁠years in the absence of stronger demand-side measures.

WHERE HAS INFLATION GONE?

Indeed, for the entire 2025, consumer price growth was flat, well below the "around 2%" goal policymakers were ‌aiming for, a sign that stimulus measures, such as a consumer goods trade-in scheme, ‍have yielded only modest results in lifting sentiment and containing ‍deflationary pressure.

Prices of gold jewellery surged 68.5%, NBS data showed.

Core inflation, ‍which excludes volatile prices of food and fuel, rose 1.2% year-on-year last month, unchanged from November.

Goldman Sachs economists estimate that core price gauge excluding gold prices edged down in December from the prior month.

Annual growth in China's consumer prices has for years failed to meet policymakers' targets as the economy struggled to recover from the pandemic.

A prolonged property market crisis and a weak job market have contributed to lackluster household demand as well as overcapacity and price competition among producers.

On a monthly basis, CPI climbed 0.2% in December, compared with a 0.1% dip the previous month and a forecast for a 0.1% rise.

The producer ⁠price index (PPI) fell 1.9% year-on-year in December, remaining in a deflationary funk for more than three years even as it eased from a 2.2% drop in November. The gauge was expected to have fallen 2% in the Reuters poll.

NBS's Dong attributed the moderation in factory-gate deflation to both global commodity prices, including rising prices of non-ferrous metals, and policies for controlling capacity in key industries.

Capital Economics' Huang, however, said there hasn't been "any fundamental improvement in overcapacity."

"Prices of consumer durables continued to fall at a faster pace than during the depths of the global financial crisis, highlighting that the issue of excess supply remains unresolved in much of the manufacturing sector," she said.

For the whole year, PPI fell 2.6%.

Given the slowdown in economic momentum in the second half of last year, the market is watching for signs of additional government support measures in 2026 as top leaders have committed to pursuing a more proactive macroeconomic policy framework.

The central government has allocated 62.5 billion yuan ($8.95 billion) from special treasury bond proceeds to local governments to ‌keep funding the consumer goods trade-in scheme in 2026.

The government has also pledged to flexibly use monetary policy tools, such as cuts to interest rates and banks' reserve requirement ratio, to keep liquidity ample and spur growth.