Saudi Arabia boosts health infrastructure with 5 new hospitals, increased budget 

Saudi Arabia has made significant strides in advancing its healthcare sector as part of its broader vision to improve the well-being of its citizens and residents. File
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Updated 02 December 2024
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Saudi Arabia boosts health infrastructure with 5 new hospitals, increased budget 

RIYADH: Saudi Arabia is set to open five new hospitals by 2025, adding 963 beds across key provinces as part of a broader SR260 billion ($69.3 billion) budget allocation to the health and social development sector. 

This allocation, which represents the second-largest share of government spending, covers a wide range of initiatives, including increasing bed capacity to 23 beds per 10,000 residents in the targeted provinces, as outlined in the Ministry of Finance’s budget report.

The new facilities, located in Rijal Almaa, Dhahran Al-Janoub, Hail, Makkah, and Riyadh, include a dedicated mental health hospital in the capital. These projects aim to enhance access to care and improve healthcare infrastructure across the Kingdom.  

Other initiatives for 2025 include emergency services, early detection programs, cancer care, and expanded dialysis services, highlighting a comprehensive approach to healthcare that emphasizes prevention, early intervention, and state-of-the-art infrastructure. 

In addition to healthcare, these funds will also support the management of human resources and social services, including social security and welfare. 

They will also extend to the cultural, media, sports, and entertainment sectors, as well as the implementation of the Quality of Life Program. This underscores Saudi Arabia’s holistic approach, recognizing the interconnectedness of health and social development.  

Healthcare advancements 

Saudi Arabia has made significant strides in advancing its healthcare sector as part of its broader vision to improve the well-being of its citizens and residents. 

Over the past decade, the Kingdom has invested heavily in modernizing healthcare infrastructure, expanding medical services, and improving access to quality care nationwide.  

With initiatives like Vision 2030, which outline ambitious goals to diversify the economy and enhance public services, the health sector has become a key area of focus. 

The government has prioritized expanding health coverage, upgrading hospitals and clinics, and implementing advanced technologies such as electronic health records and telemedicine services. 

Additionally, Saudi Arabia places strong emphasis on preventive healthcare, early diagnosis, and specialized treatment programs, all aimed at reducing the disease burden and improving the quality of life. 

Key investments 

The ministry’s report indicated that the new hospitals will be outfitted with state-of-the-art medical equipment, and skilled healthcare professionals will be employed to address the health needs of the population and enhance the quality of care.  

To bolster emergency medical services, Saudi Arabia plans to deploy 568 vehicles, including ambulances, electric vehicles, and amphibious units.  

These vehicles will play a crucial role in transporting the injured and medical supplies, enhancing the overall responsiveness of healthcare services, especially in remote areas and during emergencies. This extensive fleet will ensure timely medical attention and improve access to healthcare across all regions, regardless of geographic challenges. 

Health innovations 

The health sector will also prioritize early screening for newborns and young children in 2025, aiming to reduce disability and enhance overall quality of life. 

This includes the implementation of newborn screening programs to detect hearing impairments and genetic disorders. 

A comprehensive database will be created, linking both public and private sectors to ensure early diagnosis and intervention. 

Additionally, preschool hearing screenings will be integrated with the Noor system to improve educational outcomes for children, further supporting the early identification of health issues that could impact development. 

In an effort to reduce the incidence of cervical cancer, the Kingdom will increase HPV vaccination coverage for girls, targeting a 90 percent vaccination rate.  

The program will provide vaccines for girls in their first year of intermediate school and offer early detection services for women aged 30 and older. Positive cases will be referred to early screening programs for cervical cancer, aiming to prevent the spread of HPV and improve overall public health by detecting and addressing the virus early. 

The Kingdom is also expanding its cancer care services by implementing a modern care model across three new oncology centers. 

This includes expanding early cancer detection capabilities and providing state-of-the-art diagnostic equipment to improve the accuracy and speed of diagnoses.  

Similarly, dialysis services at Huraymila and Jazan General Hospitals will undergo significant expansion, with a 200 percent increase in capacity at each facility. These centers will receive substantial funding — SR10 million for Huraymila and SR30 million for Jazan — to ensure advanced care and accommodate more patients in need of dialysis. 

In parallel with these service expansions, the Kingdom is enhancing its medical evacuation capabilities by developing and activating medical evacuation centers, command and control hubs, and advanced ambulance services across the country. 

Notably, the National Health Emergency Operations Center has earned recognition from the World Health Organization for its efficiency and preparedness, positioning Saudi Arabia as a leader in healthcare crisis management and emergency response. 

Healthcare achievements 

The Ministry of Finance budget report highlighted the issuance of 113 million electronic prescriptions through the Wasfaty service, resulting in SR1.3 billion in savings and reducing costs by SR2.4 billion. 

The Wasfaty service is an electronic prescription platform introduced by the Saudi Ministry of Health. It allows doctors to prescribe medications electronically, replacing traditional paper prescriptions. 

This service is part of Saudi Arabia’s broader efforts to digitize healthcare services and improve efficiency. Through this platform, prescriptions can be directly sent to pharmacies, streamlining the process for both patients and healthcare providers. It also enhances medication tracking, reduces prescription errors, and helps manage healthcare costs more effectively. 

Emergency services have seen a 20 percent improvement in response time, enhancing life-saving efforts with more efficient ambulance and air transport services. 

Health coverage has expanded, with 12.5 million beneficiaries and a reduction in patient transfers outside local areas. 

Operational efficiency has been boosted, leading to a 27 percent increase in scheduled surgeries and a 91 percent improvement in emergency service access within four hours.  

The localization of specialized tests has grown by 13.1 percent, reducing reliance on external laboratories and cutting long-term costs. 

Dental services have also flourished, with a 137 percent increase in clinic capacity, a 200 percent rise in appointments, and a 250 percent growth in primary healthcare services.  

Additionally, the provision of advanced ambulances has improved services for challenging terrains and mass casualty incidents. The sector has also achieved 17 international accreditations, raising the health compliance rate to 84 percent across 252 facilities, solidifying its commitment to global standards. 

Digital advancements 

Investment in digital healthcare systems is proving beneficial in improving performance and health outcomes, as highlighted by the Organization for Economic Cooperation and Development. 

According to the World Economic Forum, Saudi Arabia allocated over $50 billion in 2023 to initiatives, including digital health services aimed at improving efficiency and accessibility.  

McKinsey predicts that the widespread adoption of digital solutions could bring an additional $15 billion to $27 billion in economic benefits by 2030. 

Saudi Arabia’s partnership with Orion Health to create the world’s largest health information exchange, connecting 5,000 institutions and 32 million people, is one example of such efforts. 

Artificial Intelligence, especially generative AI, is expected to play a significant role in improving patient care and healthcare efficiency, with the potential to contribute $320 billion to the Middle East’s economy by 2030, according to the WEF.  

Robots are also being explored for improving precision, workplace safety, and elderly care. Saudi Arabia, for instance, saw a 52 percent increase in robotics company registrations between 2022 and 2023. 

As Saudi Arabia continues to focus on digital health, AI advancements, and comprehensive care models, its efforts are poised to transform the sector, improve health outcomes, and support the well-being of its growing population.  


Lower funding costs driving credit growth in Saudi banks

Updated 11 January 2026
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Lower funding costs driving credit growth in Saudi banks

The operating environment for Saudi banks has turned increasingly supportive of credit expansion, reflecting a broad-based decline in key interest-rate benchmarks, including the repurchase and reverse repurchase agreement rates and the Saudi Interbank Offered Rate. 

This easing cycle, evident by November 2025, has reshaped funding conditions across the banking system and reinforced the sector’s capacity to support economic activity.

Policy rate reductions by the Saudi Central Bank have lowered short-term funding costs and contributed to a marked softening in interbank rates. This trend is clearly illustrated by the movement in three-month SAIBOR, which declined to 4.97 percent in November 2025, down from 5.53 percent in the same month a year earlier. The decline signals not only improved liquidity conditions but also strengthening confidence within the interbank market.

In parallel, cuts to repurchase and reverse repurchase agreement rates have further enhanced system-wide liquidity, enabling banks to deploy capital more efficiently. Improved funding affordability has encouraged lenders to continue extending credit, particularly to the corporate sector, while the decline in SAIBOR has translated directly into lower pricing for floating-rate loans. Together, these factors have eased borrowing conditions and strengthened demand for bank financing.

Against this backdrop, the reduction in banks’ cost of funds is expected to incentivize clients—especially small and medium-sized enterprises—to expand their financing needs. 

For SMEs, lower borrowing costs can be pivotal in unlocking investment, supporting working capital requirements, and facilitating business expansion. For banks, stronger credit demand helps offset some of the pressure on net interest margins typically associated with a lower interest-rate environment.

More broadly, declining interest rates are supporting sustained growth in bank lending to the private sector. Saudi banks have demonstrated financial resilience in this environment, adapting effectively to the lower-rate backdrop while maintaining their central role in financing economic activity. Their ability to balance margin management with credit expansion underscores the sector’s operational flexibility.

Saudi banks have responded positively to the reduction in funding costs, as evidenced by the continued and steady expansion of private-sector lending. Total bank credit to the private sector rose by 10.6 percent year on year in November 2025, reaching SR3.1 trillion ($838 billion). This growth reflects both stronger demand and banks’ willingness to lend amid improved funding conditions.

The expansion in credit has been broad-based, with notable gains across segments that are particularly sensitive to interest-rate movements. Lending to SMEs has shown especially strong momentum. Total bank credit to SMEs reached SR427.7 billion in the third quarter of 2025, accounting for 11 percent of total private-sector lending, compared with SR311.8 billion in the same period of 2024, when SMEs represented 9.1 percent of the lending portfolio. This shift highlights the growing role of SMEs in the Kingdom’s economic landscape.

Mortgage lending has also maintained its upward trajectory, increasing by 10.8 percent to around SR938 billion in the third quarter of 2025. Lower financing costs, combined with ongoing housing initiatives, have continued to support demand for residential mortgages, reinforcing the banking sector’s contribution to higher homeownership rates.

Household credit demand strengthened further in the third quarter of 2025. Consumer loans totaled SR476.6 billion, while credit card lending reached SR33.4 billion. These segments recorded year-on-year growth of 3.1 percent and 10.3 percent, respectively, reflecting both improved consumer confidence and more favorable borrowing conditions.

Islamic banking has remained a key driver of sectoral growth, supported by rising demand for Shariah-compliant products. Total Islamic financing reached SR2.7 trillion in the third quarter of 2025, representing a year-on-year increase of 13.5 percent. This expansion underscores the depth and maturity of Islamic finance within the Saudi banking system.

Importantly, the growth in credit has been underpinned by the sector’s strong capital position, ample reserves, and solid profitability metrics, all of which reinforce financial soundness. In November 2025, capital and reserves accounted for 18.76 percent of total deposits, comfortably exceeding regulatory requirements.

Aggregate net income before zakat and taxes rose to SR93.7 billion, up 16.7 percent from SR80.3 billion a year earlier, highlighting banks’ ability to generate earnings despite a lower-rate environment.

In sum, the easing of monetary conditions has created a favorable operating environment for Saudi banks, supporting robust credit growth across corporate, SME, mortgage, household, and Islamic banking segments. This expansion, driven by a lower cost of funds, aligns closely with the objectives of Saudi Vision 2030, particularly in fostering private-sector development, expanding SME participation, increasing homeownership, and deepening the Islamic finance ecosystem.

While lending growth has outpaced deposit growth, Saudi banks have maintained prudent liquidity positions and financial resilience. Diversified funding sources, effective balance-sheet management, and improved funding affordability have enabled the sector to navigate this phase of the cycle.

Within the framework of the Kingdom’s countercyclical economic policy approach, sustained credit expansion alongside declining funding costs is expected to support non-oil economic activity, enhance financial intermediation, and help banks manage profitability pressures while contributing to overall macroeconomic stability.

 

Talat Zaki Hafiz is an economist and financial analyst.

X: @TalatHafiz