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Expo 2030 to Boost Vital Sectors in Saudi Arabia

Saudi Arabia allocated a sum of 7.8 billion dollars to host the global fair (AFP)
Saudi Arabia allocated a sum of 7.8 billion dollars to host the global fair (AFP)
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Expo 2030 to Boost Vital Sectors in Saudi Arabia

Saudi Arabia allocated a sum of 7.8 billion dollars to host the global fair (AFP)
Saudi Arabia allocated a sum of 7.8 billion dollars to host the global fair (AFP)

Economic analysts anticipate that Riyadh’s successful bid to host the Expo 2030 world fair will catalyze a significant boost in Saudi Arabia’s economy, contributing approximately $50 billion.

This triumph is expected to attract foreign investments and foster prosperity and growth across various vital economic sectors in the Kingdom.

Among these sectors are aviation, transportation, real estate, housing, communications, logistics, retail, hotels, hospitality, and tourism.

The exhibition is poised to provide a substantial opportunity for both local and international companies to attract foreign investments.

Mohammed bin Dleim Al-Qahtani, an economics professor at King Faisal University, shared his insights with Asharq Al-Awsat, predicting that organizing the fair will enhance Saudi Arabia’s economic activities by around $50 billion.

This, in turn, will drive development in several crucial and vibrant economic sectors, affirmed Al-Qahtani.

The exhibition’s revenues, according to Al-Qahtani, will be distributed across various sectors: restaurants and hotels (approximately $5 billion), contracting ($11.5 billion), business services and event organization ($28 billion), and small project expenditures ($5.5 billion).

Furthermore, the world fair is expected to create approximately 60,000 jobs annually until the exhibition date, with a total estimated employment reaching 420,000 positions.

In Al-Qahtani’s opinion, the success of hosting Expo 2030 is set to enhance Saudi Arabia’s global image as a leader in hosting international events, fostering global communication, travel, and tourism.

This achievement is expected to bolster the Kingdom’s Gross Domestic Product (GDP) by more than 2.5%, propel key sectors outlined in “Vision 2030” forward, attract over 50 million visitors during the exhibition's duration, stimulate real estate growth, catalyze long-term investments, and significantly support the knowledge-based economy.

Meanwhile, Mohammed Mokni, a financial and investment expert and the CEO of “Ethmar,” a company owned by Imam Mohammed bin Saud University in Saudi Arabia, described Riyadh's win in hosting the exhibition as a testament to the Kingdom’s global stature.

Mokni emphasized the world's confidence in Saudi Arabia’s ability to organize this major global event, where it competes with leading nations in providing grand venues, superior services, infrastructure, and logistical aspects, as well as financial readiness.

The CEO highlighted that the Saudi bid considered all these facets, showcasing exceptional hosting capabilities from the first round of voting, leading to this exceptional victory.

Mokni further stated that this victory serves as international recognition of the Kingdom’s success in implementing its developmental plans and projects stemming from “Vision 2030,” initiated in 2015.

It also reflects the economic and political strength, resilience, and capability of Saudi Arabia, stressed Mokni.

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S&P Expects Saudi Issuances to Continue Domestically, Internationally Driven by Vision 2030

A view of the Saudi capital, Riyadh. (SPA)
A view of the Saudi capital, Riyadh. (SPA)
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S&P Expects Saudi Issuances to Continue Domestically, Internationally Driven by Vision 2030

A view of the Saudi capital, Riyadh. (SPA)
A view of the Saudi capital, Riyadh. (SPA)

S&P Global Ratings anticipates that Saudi issuers will continue to tap local and international capital markets to finance projects under Saudi Arabia’s Vision 2030. The agency expects debt levels to remain manageable, with private sector debt-to-GDP ratios staying below 100% over the next 12 to 24 months.

According to S&P’s report, “Saudi Capital Market Overview: Rising Issuance Levels Are Just the Start”, Saudi companies have dominated issuance activity in recent years. Over the past five years, Saudi entities, including government-related entities, have accounted for roughly two-thirds of non-governmental US dollar-denominated issuances. However, the report predicted that banks will play an increasingly significant role in the future.

The report noted that Saudi issuers have raised over $130 billion in US dollar-denominated issuances over the last five years. This adds to $144 billion raised domestically in Saudi riyals during the same period, driven by Vision 2030 initiatives.

While the government accounts for about 60% of these issuances, the Kingdom’s Vision 2030 has created expansive opportunities in the non-oil economy and banking system, paving the way for future growth, the report underlined.

S&P highlighted the development of Saudi Arabia’s mortgage-backed securities market as a key factor to watch over the next two years. As of the end of September 2024, Saudi banks held more than $175 billion in mortgage financing, most of which carried fixed interest rates but were funded through short-term resources, primarily local deposits.

With declining interest rates, some of these mortgages could re-enter circulation, enabling banks to sell them in the secondary market without incurring losses. This would allow banks to offload mortgage financing from their balance sheets, provided legal challenges surrounding the mortgage-backed securities issuance are resolved or mitigated sufficiently to attract local and international investor interest.

According to the report, developing the mortgage-backed securities market could significantly enhance banks’ financial capacity, enabling them to better support the implementation of Vision 2030. This could occur through existing infrastructure, such as the Saudi Real Estate Refinance Company, or via direct issuances in the capital markets.