The recent fall in oil prices means that the energy sector’s contribution to Saudi Arabia’s economic growth will be limited in 2015, with expansion to be driven more by the non-oil sector, which is forecast to increase by about 5% in 2015. Saudi Arabia’s crude oil production averaged 9.71m bpd in 2014, compared to 9.63m in 2013 and 9.76m in 2012. However, despite lower oil prices, the Kingdom…
In 2015 Saudi Arabia will have generated twice as much electricity as it did in 2000 as demand in the Kingdom continues to expand. Energy-intensive industries, as well as highly subsidised utilities prices for customers, look set to push demand even higher in the coming years, and the government is increasingly looking to boost private sector participation in the sector. Numerous initiatives are under…
The abundance of hydrocarbons in the Kingdom has led to a proliferation of downstream petrochemicals businesses. The natural gas that is allocated to producers at a subsidised price forms a significant part of Saudi Arabia’s value proposition to foreign investors. Demand from rapidly expanding markets in Asia, as well as steady sales to established Asian centres, should ensure that the Kingdom’s…
In 2014 Saudi Arabia spent 35% of its budget on defence, equivalent to roughly $80.7bn. The coming years are likely to see increased emphasis on homeland security in three areas: securing the Kingdom’s northern and southern borders, cybersecurity and counter-terrorism. The Kingdom remains focused on developing a sophisticated domestic defence industry, investing heavily to this end in research and…
Competition in Saudi Arabia’s telecoms sector continues to grow, with companies continually seeking to invest in the infrastructure that will connect customers to a broader range of communications services. As the number of mobile internet users continues to rise, the Kingdom’s operators are seeing demand for traditional voice and text services become gradually displaced by data services and mobile…
Despite the global fall in oil prices, Saudi Arabia’s retail sector continues to enjoy robust growth, fanned by its solid base of domestic consumers and strengthened by a growing youth population and rising disposable incomes. The strong performance of retailers across a number of sectors is leading to increased demand for dedicated mall space, which is expected to command a premium in the short…
Saudi Arabia’s transport services have witnessed significant developments in recent times, and this is set to continue with an anticipated $190bn to be invested in the sector through to 2025. The majority of this – around $141bn – will go towards rail and public transport networks. Successive phases of railway development will extend the network across the entire country, with the aim of bringing…
With Saudi Arabia’s 10th Development Plan the Kingdom has committed itself to responsible stewardship of the environment. The plan emphasises the importance of creating incentives and regulations that will underpin environmentally sustainable growth moving forward. Initiatives currently under way include moves towards more fuel-efficient cogeneration plants, carbon capture and storage, and investment…
A young population and rising disposable incomes signal an optimistic future for the Saudi Arabian real estate sector. With the population growing at a rate of 2.6% per year, the need for housing is expanding rapidly, especially given that 67% of Saudis are under the age of 30. The retail segment also offers significant opportunities for developers, with vacancy rates at shopping centres in the capital…
Despite the recent fall in oil prices, Saudi Arabia’s government is pushing ahead with its ambitious development agenda. The outlook is thus bright for the Kingdom’s construction firms, with projects planned under government’s 10th Development Plan including investments worth $258.2bn in real estate; $151.5bn in petrochemicals; and $126.7bn in electricity, gas and water. Indeed, in the short…
