Saudi economy to grow by 3.9% in 2024 as inflation stabilizes: OECD

The OECD revealed that Saudi Arabia’s inflation rate is expected to average 2.1 in 2024, a sign that the Kingdom is successfully combating price pressures. Shutterstock
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Updated 19 September 2023
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Saudi economy to grow by 3.9% in 2024 as inflation stabilizes: OECD

RIYADH: Affirming Saudi Arabia’s strong growth prospects in the near term, the Organization for Economic Co-operation and Development revealed that the Kingdom’s gross domestic product is expected to rise by 3.9 percent in 2024. 

The OECD revealed that Saudi Arabia’s inflation rate is expected to average 2.1 in 2024, a sign that the Kingdom is successfully combating price pressures. 

Earlier this month, the International Monetary Fund echoed similar views and noted that Saudi Arabia has succeeded in maintaining its average consumer price index despite inflationary pressures faced by several countries across the globe. 

The report noted that Saudi Arabia will be among the few countries with economic growth above 3 percent in 2024. 

The OECD projected that the US and the UK could grow by 0.8 percent and 1.3 percent in 2024. 

On the other hand, the Australian economy could witness an economic growth of 1.3 percent and Brazil 1.7 percent. 

The OECD projected Japan’s economic growth at 1.8 percent in 2023 and 1 percent in 2024. 

China and India are some of the countries that are expected to surpass Saudi economic growth, expanding by 4.6 percent and 6 percent, respectively. 

The report added that the Saudi economy will grow by 1.9 percent in 2023 while the inflation rate will remain stable at 2.5 percent. 

In its report, the OECD revealed that the world economy is expected to grow by 3 percent and 2.7 percent in 2023 and 2024, respectively, while the inflation rate is expected to moderate. 

“Inflation is projected to moderate gradually over 2023 and 2024 but to remain above central bank objectives in most economies,” the OECD said in its report. 

“Headline inflation is declining, but core inflation remains persistent in many economies, held up by cost pressures and high margins in some sectors,” the report added. 

The European Central Bank had raised a key interest rate to a record high last week but hinted this might be its last hike. On the other hand, the US Federal Reserve is expected to pause its tightening campaign on Wednesday. 


High 5G coverage shows Saudi Arabia is 'technically advanced,’ says Nokia CEO

Updated 6 sec ago
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High 5G coverage shows Saudi Arabia is 'technically advanced,’ says Nokia CEO

RIYADH: Saudi Arabia’s 5G coverage is almost double the global average of 42 percent thanks to “really good operators that have high demands,” according to a senior industry executive.

Speaking to Arab News, Pekka Lundmark, CEO of telecommunications firm Nokia, underlined how the Kingdom’s 77 percent coverage rate marks it out compared to several parts of Europe which are not as well connected.

Lundmark also discussed the upcoming deployment of 5G Advanced technology – expected to enter the market around 2025 – noting that this shift is a step towards the development of 6G.

Reflecting on the connectivity progress in the Kingdom, the CEO said: “Saudi market is technically advanced. There are really good operators that have high demands, which is good, and then there are some particular characteristics, which you don't have (anywhere) else and just one example would be the Hajj season where the pilgrims do their rituals.” 

He added: “This is an enormous stress test for the network when they take their videos and pictures and want to be connected and you have millions of people in the same place ... the Saudi market is driving us from a global perspective for innovations in network performance.”

Lundmark also stated that 5G Advanced has significant capabilities including supporting emerging technologies such as augmented reality and virtual reality devices. These services require high bandwidth, extremely low latency, high quality of service, and reliability from the network.

“Then on the industrial side, one example is that it will include support for drones, drones will have many applications in different types of physical industries,” Lundmark stated.

Additionally, 5G Advanced will support digital twins, a concept where a digital replica of an industrial site is created.

“There’s a lot it's going to add. That's really good because sometimes I hear that, now 5G is ready and now we can start waiting for 6G which will come at the end of the decade. That is completely untrue. There is so much still to do on 5G,” Lundmark stressed.

Furthermore, he further discussed the significance of the Saudi market in this sector and its expected growth in the future, highlighting that despite a weak global performance in 2023, the Middle East and Africa, including the Kingdom, experienced 8 percent growth in the industry.

The focus is on collaborating with key operators and developing enterprise customers for industrial digitalization and other initiatives.

“The market is attractive for investment, the population is young which is not the case in most other parts of the world. There's a lot of capital available and the ambition level of the actors is very high,” Lundmark said.

He added: “You definitely have the right conditions for investment, and again, when I look globally, of course, there are also other places where there is a lot of reasons to invest.”

During the interview, Lundmark further discussed the importance of safety, productivity, and material efficiency, especially in industries like oil and gas.

An integral aspect of the Vision 2030 agenda involves diversifying the Saudi economy, establishing entirely new industries, and embracing the new generation of networks and extensive digitalization.

Lundmark believes this presents a significant opportunity for the Kingdom to “to leapfrog directly into digital industries” as the Kingdom is starting from scratch in many areas as opposed to modernizing established systems.

He added: “That is exactly why we feel that the Saudi market is so exciting.”


 


WTO conference spotlights global trade challenges and collaborative solutions 

Updated 7 min 15 sec ago
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WTO conference spotlights global trade challenges and collaborative solutions 

RIYADH: Global trading system accessibility, intellectual property, and dispute settlement take center stage as the 13th WTO Ministerial Conference commenced in Abu Dhabi. 

The four-day event starting on Feb. 26 will address these issues within the World Trade Organization, featuring the participation of trade ministers and senior officials from around the world, the Saudi Press Agency reported. 

The event will bring together 175 member states, private sector leaders, non-governmental organizations, and civil society representatives.  

The goal is to collaborate on advancing a more efficient, sustainable, and inclusive trading system while enhancing the effectiveness of trade policies and programs.


Goldman Sachs, Mubadala sign $1bn private credit partnership to invest in Asia Pacific 

Updated 33 min ago
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Goldman Sachs, Mubadala sign $1bn private credit partnership to invest in Asia Pacific 

RIYADH: Business entities in the Asia Pacific region are poised to benefit from a $1 billion partnership between Emirati firm Mubadala Investment Co. and Goldman Sachs. 

To be managed by Private Credit at Goldman Sachs Alternatives, with dedicated on-the-ground teams across multiple Asia Pacific markets, the partnership aims to deploy long-term capital, offering customized private credit solutions to high-quality companies and sponsors in the region, according to a press statement. 

The release added that the global Private Credit team, consisting of 165 experienced credit investment professionals managing over $110 billion in assets, leverages Goldman Sachs’ network and capabilities to source and underwrite global lending opportunities. 

Marc Nachmann, global head of asset and wealth management at Goldman Sachs, said: “This partnership bolsters the expansion of our Asia Credit platform and investment in new opportunities across the Asia Pacific region where bespoke credit solutions are needed.” 

He added: “We continue to believe our rigorous underwriting and dedicated on-the-ground sourcing provides us differentiated investment opportunities.”  

The collaboration plans to invest across the private credit spectrum, targeting multiple Asia Pacific markets, with a particular focus on India.

This aligns with both firms’ endeavors to continue scaling their investment activity in the growing Asia Pacific credit market. 

“The diverse and rapidly growing economies, as well as the increasing private equity deal volumes, are significantly driving demand in Asia Pacific for customized credit solutions from non-traditional lenders,” said Omar Eraiqat, deputy CEO of diversified investments at Mubadala. 

“This partnership with Goldman Sachs compliments our aspirations to grow our private credit exposure in Asia Pacific, a region that is central to Mubadala’s strategic growth initiatives,” he added. 


ADNOC Distribution to host Investor Day to showcase new growth strategy

Updated 16 min 41 sec ago
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ADNOC Distribution to host Investor Day to showcase new growth strategy

RIYADH: UAE’s energy retailer, Abu Dhabi National Oil Co. Distribution, is set to host an Investor Day to inform the market about its recent strategic growth plans.

ADNOC, listed on the Abu Dhabi Securities Exchange, reached $1 billion in earnings before interest, tax, depreciation, and amortization in 2023 and intends to continue its upward trajectory by projecting further EBITDA growth throughout the period 2024 to 2028.

The company also aims to elevate its involvement in international operations within Saudi Arabia and Egypt while considering inorganic possibilities with a strong balance sheet and cash flow.

“ADNOC Distribution has demonstrated a robust track record of value creation through its smart growth strategy, pursuing new opportunities in domestic as well as international markets,” Bader Saeed Al-Lamki, CEO of the firm, said

He added: “Since its market debut in late 2017, the company has delivered robust financial performance and doubled shareholder value. 2023 was a transformative year for ADNOC Distribution, with the company generating EBITDA of over $1 billion, an increase of 33 percent compared to 2018.”

ADNOC Distribution is expanding its range of low-carbon energy solutions, such as biofuels, electric vehicles, and hydrogen, to bolster the decarbonization efforts within the transportation sector. Additionally, the company is broadening its non-fuel retail offerings.

In 2023, ADNOC Distribution experienced significant growth in fuel volumes and non-fuel retail business across Gulf Corporation Council markets, achieving a notable four-year-high conversion rate of 25 percent.

As part of its updated business strategy, ADNOC Distribution will persist in investing in the core UAE market.

Furthermore, the company aims to enhance its existing network by expanding its non-fuel retail business and optimizing real estate assets to solidify its position as the preferred brand for both retail and commercial customers.

The firm also seeks to improve its operational efficiency to reach up to $50 million in additional savings by 2028, in addition to the $130 million in like-for-like cost savings achieved between 2019 and 2023.

“The company is well positioned to take advantage of evolving energy markets and enter a new phase of growth. We remain committed to a disciplined capital allocation and delivering attractive and visible shareholder returns,” Al-Lamki added.

According to a press statement by ADNOC, the firm is placing sustainability at the core of its day-to-day operations, reducing its carbon footprint while exploring emerging opportunities and enabling customers to decarbonize.


Ma’aden returns to profit after brief blip, latest filings show

Updated 26 February 2024
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Ma’aden returns to profit after brief blip, latest filings show

RIYADH: Profits for Saudi Arabian Mining Co. rebounded in the final quarter of 2023, with the company registering gains of SR890.4 million ($237.4 billion).

This came after the firm, also known as Ma’aden, posted a SR83.4 million loss over the previous three months.

According to a press statement, the performance of the company in the three months to the end of 2023 was driven by a surge in total revenue, which reached SR8.03 billion, representing a rise of 28 percent compared to the previous quarter.

Lower operating costs and favorable raw material expenses were other factors that contributed to a rise in revenue, the company added. 

For Saudi Arabia, developing the mining sector is crucial, as the Kingdom is steadily diversifying its economy, aligned with the goals outlined in Vision 2030. 

In the press statement, Ma’aden CEO Robert Wilt said the firm will continue with explorations in 2024 to unlock the Saudi mining sector’s potential which is currently valued at $2.5 trillion. 

“Ma’aden is undertaking one of the world’s largest exploitation programs to unlock the $2.5 trillion mineral endowment in the Kingdom. We discovered a significant gold resource potential discovery south of Mansourah-Massarah, which could put us at the center of the world’s next gold rush. We expect to aggressively expand our exploration activities in 2024,” said the CEO. 

While the company saw quarter-on-quarter gains to close out 2023, the mining giant’s net profit dipped by 83 percent year-on-year to come in at SR1.57 billion — down from SR9.31 billion over the previous 12 months.

The statement further noted that shareholders’ equity, excluding minority interest, increased to SR46.42 billion by Dec. 31, 2023, compared to SR45.06 billion a year earlier.

Wilt added that the company made the first major investment in the global mining sector in 2023, with Manara Minerals, a joint venture between Ma’aden and Saudi Arabia’s Public Investment Fund securing a 10 percent share in Brazilian company Vale Base Metals Ltd.

“We are confident that our strategy will continue to deliver strong future growth and create value for our shareholders, our people and the economic diversification of the Saudi economy, in line with Vision 2030,” added Wilt.