Saudi Arabia, Spain sign MoU to boost SME sectors and deepen economic ties

Saudi Minister of Economy and Planning Faisal Alibrahim and Spanish Minister of Economy, Trade and Business Carlos Cuerpo signing the agreement. Ministry of Economy and Planning
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Updated 22 May 2025
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Saudi Arabia, Spain sign MoU to boost SME sectors and deepen economic ties

  • Deal to back SMEs through partnerships and initiatives
  • Saudi-Spanish Joint Commission meeting focused on focused on strengthening economic, social, and cultural ties

RIYADH: Saudi Arabia and Spain are set to strengthen cooperation between small- and medium-sized enterprises thanks to a wide-ranging agreement across key sectors.

The memorandum of understanding, signed by Saudi Minister of Economy and Planning Faisal Alibrahim and Spanish Minister of Economy, Trade and Business Carlos Cuerpo in Riyadh, outlines joint efforts in economic modeling and policy-making.

It aims to back SMEs through partnerships and initiatives, as well as facilitating joint projects and bilateral participation in economic events, according to a statement by the Ministry of Economy and Planning.

The agreement comes as the Kingdom’s Vision 2030 plan aims to further elevate the SME sector’s contribution to 35 percent of the gross domestic product by the end of the decade as part of its economic diversification initiative.

The signing of the agreement coincided with the fourth session of the Saudi-Spanish Joint Commission, which convened in Riyadh. The meeting was co-chaired by Al-Ibrahim and Cuerpo, with senior officials from both countries in attendance.

“Officials from both sides joined the session to discuss ongoing and future initiatives aimed at enhancing economic, social, and cultural collaboration between the two countries,” the Ministry of Economy and Planning said on X.

The session focused on strengthening economic, social, and cultural ties, reflecting the deep-rooted partnership and shared ambitions between the Kingdom and Spain.

The MoU also includes the exchange of information and statistics related to industry, technology and innovation to achieve sustainable development goals within the framework of Saudi Vision 2030.​

In an interview with Al Arabiya, Cuerpo described the relationship between Saudi Arabia and Spain as a strong and deepening economic partnership, highlighting the Kingdom’s central role as the European country’s primary trade partner in the region and noting the steady growth in bilateral trade in recent years.

“I say over the past three years, it’s grown by 13 percent. Investment has grown, also, heavily over the past few years. But there is still room for us to grow, for us to further collaborate and further diversify our relations, particularly in terms of investment, and particularly also in terms of the presence of Spanish companies here and also of Saudi companies in Spain,” Cuerpo said.

He continued: “Just look at the presence of Spanish companies in the Kingdom, it has grown by 60 percent over the past three years, and in particular in key sectors for the Vision 2030 like energy, infrastructure or others — water, for example.”

In a move to further strengthen their economic ties, the Saudi-Spanish Business Forum kicked off on May 22 in the Saudi capital with the participation of Alibrahim and Cuerpo, along with over 300 officials and investors from both countries.

The event was organized by the Federation of Saudi Chambers in collaboration with the Ministry of Economy and Planning and the Ministry of Investment.

The forum saw the signing of four agreements between Saudi and Spanish companies across various sectors. In addition, it featured sector-focused sessions and workshops highlighting the investment landscape in both states, including available incentives and opportunities in priority industries.

Addressing the audience, Cuerpo said that his country’s current economic conditions are well-suited to strengthening ties with the Kingdom, highlighting that Spain has reached a record level of financing capacity, according to the Saudi Press Agency.

“He also pointed out that tourism is the main driver of the Spanish economy, and that the country ranks among the leaders in attracting renewable energy projects and in research and development activities related to artificial intelligence,” the SPA report stated.

In his remarks, Alibrahim said the Kingdom is moving steadily toward a knowledge-based economy, underpinned by the goals of Vision 2030. He noted that non-oil sectors accounted for 54.8 percent of Saudi Arabia’s gross domestic product in 2024 — the highest in the country’s history.

“He also pointed out that non-oil sector investments have surged by 70 percent since the launch of the Vision 2030 reform plan, driven by more than 900 economic and structural reforms that have boosted investor confidence and improved the business climate,” as per the SPA report.

For his part, Khaled Al-Hogail, chairman of the Saudi-Spanish Business Council, said the two countries are working to unlock investment potential and expand trade in key sectors.

According to official data, the volume of trade between Saudi Arabia and Spain reached SR22.9 billion ($6.1 billion) in 2024. Saudi exports totaled SR12.4 billion, while imports from Spain stood at SR10.5 billion.

In October, Bandar Alkhorayef, minister of industry and mineral resources, discussed ways to develop economic relations with Cuerpo and increase Spain’s investments in Saudi Arabia.

Alkhorayef highlighted the goals of Saudi Vision 2030 to diversify the Kingdom’s economy and, through various incentives, attract foreign investment in the industrial and mining sectors.


PIF launches commercial paper program to diversify funding sources

Updated 12 sec ago
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PIF launches commercial paper program to diversify funding sources

RIYADH: Saudi Arabia’s Public Investment Fund has launched its first commercial paper program, introducing a new tool to diversify its funding sources and enhance short-term liquidity management.

A commercial paper is a debt instrument used to raise short-term funding, offering faster access to funds than traditional loans. It is widely used in global financial markets, offering PIF greater flexibility in meeting its needs while aligning with its dynamic investment priorities.

The CP program will enable PIF to issue short-term debt through offshore special-purpose vehicles, enhancing its liquidity management and complementing its long-term capital-raising initiatives.

According to a press release, the initiative, which includes US and Euro CP sub-programs, has received top-tier credit ratings of Prime-1 from Moody’s and F1+ from Fitch, underscoring its strong financial standing.

PIF has consistently demonstrated its ability to pioneer new financial instruments. In 2022, it became the first sovereign wealth fund globally to issue a green bond, including a landmark century green bond, followed by a successful $3.5 billion sukuk issuance, according to the fund.
 
PIF’s Head of Global Capital Finance and Investment Strategy and Economic Insights, Fahad Al-Saif, emphasized the program’s role in strengthening the fund’s resilient and adaptive financial framework. 

“The establishment of our CP program reflects the continued strength and depth of PIF’s capital raising strategy; one that is dynamic, resilient, and fit for purpose, aligning funding solutions with our long-term investment priorities,” he said.

In a press release, Moody’s Ratings said that the programs will operate under newly established special purpose vehicles, CPDE Investment Co. and CPNL Investment Limited.

“PIF has an excellent liquidity profile,” Moody’s said in its rating rationale, citing the fund’s cash reserves of SR106 billion ($28 billion) and undrawn credit facilities as key strengths.

According to the agency, the USCP program will support maturities of up to 397 days, while the ECP program will cover maturities of up to 364 days, with proceeds earmarked for general corporate purposes.

PIF is Saudi Arabia’s primary investment arm, tasked with advancing economic transformation under Vision 2030. Through strategic partnerships and investments, the fund aims to build future-ready industries, create employment opportunities, and promote sustainable development.

As the driving force behind Saudi Arabia’s Vision 2030, PIF has established 103 companies since 2017, fostering economic diversification and sustainability. 


Saudi Vision 2030 puts government performance at heart of economic growth drive, says minister

Updated 1 min 12 sec ago
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Saudi Vision 2030 puts government performance at heart of economic growth drive, says minister

RIYADH: Saudi Arabia’s Vision 2030 prioritizes enhancing the performance of government bodies and institutions across the public, private, and non-profit sectors, recognizing their vital role in driving economic growth, according to the Kingdom’s economy minister. 

Speaking at the 7th edition of the King Abdulaziz Quality Award, Minister of Economy and Planning Faisal Alibrahim, who also chairs the award’s supervisory committee, said the initiative boosts competitiveness and strengthens the investment climate.

It also drives economic complexity and broadens the reach and quality of services both locally and globally — ultimately generating high-value jobs for the Saudi population, the Saudi Press Agency reported. 

This aligns with the Kingdom’s progress in the 2024 World Competitiveness Yearbook published by the Swiss-based Institute for Management Development, which ranked Saudi Arabia 16th out of 67 of the world’s most competitive countries. The business efficiency axis, in particular, advanced from 13th to 12th place. 

The overall ranking marked a one-position improvement for the Kingdom, driven by gains in business legislation and infrastructure, placing the Kingdom 4th among G20 countries. 

“Today, we celebrate national institutions that have proven that institutional excellence is not a slogan, but rather a strategic choice and a consistent management approach,” Alibrahim said in his remarks during the event.

He added: “The King Abdulaziz Quality Award is not just an occasion for recognition, but rather an ongoing journey to create models, stimulate performance, and raise the ceiling of institutional ambition.” 

Alibrahim highlighted the role of the Saudi National Model for Institutional Excellence, which he described as a practical tool for enhancing capabilities, improving performance, and maximizing institutional impact. 

The model is a framework that promotes organizational excellence across key sectors, using the King Abdulaziz Quality Award as a benchmark. 

It focuses on leadership, strategic planning, and measurable outcomes in areas like academic quality and stakeholder satisfaction, guided by scientific methods and national standards.

Prince Mohammed bin Turki bin Abdullah, secretary-general of the King Abdulaziz Quality Award, said the initiative serves as a national platform to promote positive competition and consolidates the principles of governance. 

A total of 63 organizations were recognized across gold, silver, and bronze categories for their application of high standards in quality, governance, and innovation. 

The gold-level government winners included the Ministry of Health, the Ministry of Human Resources and Social Development, the Saudi Industrial Development Fund, and the General Organization for Social Insurance. Other winners included the Ministry of Transport and Logistics, the Royal Commission for AlUla, and the Council of Cooperative Health Insurance. 

Thirty-four entities were awarded at the bronze level following a comprehensive evaluation process that measured performance, efficiency, and commitment to continuous improvement. 

Saudi Arabia’s quality award program mirrors similar efforts in more than 90 countries and reflects the Kingdom’s ambition to embed institutional excellence into its economic model. 

The King Abdulaziz Quality Award is positioned as the national benchmark for organizational performance, aiming to drive sustained development across key sectors. 


IMF warns US strikes on Iran could disrupt global economy

Updated 14 min 46 sec ago
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IMF warns US strikes on Iran could disrupt global economy

JEDDAH: The International Monetary Fund has warned that US airstrikes on Iran could amplify global economic uncertainty, with potential spillovers far beyond energy markets, its head told Bloomberg on Monday.

IMF Managing Director Kristalina Georgieva said that the fund is closely monitoring the situation in the Middle East, particularly the impact of the conflict on oil and gas prices and supply routes.

Georgieva’s remarks come after the US military conducted targeted strikes on nuclear facility sites in Iran, effectively involving itself in Israel’s campaign to dismantle the country’s nuclear program, despite Tehran’s threats of retaliation that could spark a wider regional conflict.

US President Donald Trump stated that Iran’s key nuclear sites were “completely and fully obliterated” and warned the country against retaliatory attacks, asserting that the US could strike additional targets “with precision, speed and skill.”

Georgieva told Bloomberg that the IMF are looking at this “as another source of uncertainty in what has been a highly uncertain environment” adding that the institution is watching for two things: “One, how would that impact risk premia for oil and gas. There has been some movement upward— how far would it go? And two: would there be any disruption in energy supplies?” 

She went on: “For now, no. But let’s see how events would develop— whether either delivery routes or spillovers to other countries may occur. I pray, no.”

The development saw Brent crude briefly rising by as much as 5.7 percent to $81.40 per barrel during early Asian trading on June 23 before retreating, according to Bloomberg.

When asked whether the transmission mechanism, specifically the channels where she sees the greatest impact of the Middle East shock, is currently reflected in energy prices, the managing director confirmed that it is.

“There could be secondary and tertiary impacts. Let’s say there is more turbulence that goes into hitting growth prospects of large economies, and then you have a trigger impact in a downward revision in prospects for global growth,” she told Bloomberg. 

“As you know, we have already revised downward growth projections for this year, and we will be coming up with our next projections in July.”

Georgieva continued: “What we see in the first two quarters of the year broadly confirms the picture we painted in April, and it is somewhat slower global growth, but no recession.”

The IMF’s April report sounded a warning over the weakening global economy, sharply downgrading growth forecasts from January projections. 

The fund identified surging trade tensions, record-high tariff levels, and rising policy unpredictability as key threats to both short- and long-term economic stability.


Oman to be first Gulf country to impose personal income tax

Updated 11 min 55 sec ago
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Oman to be first Gulf country to impose personal income tax

  • Tax would apply to about 1% of population
  • It will impose 5% levy on taxable income for individuals earning over 42,000 rials

RIYADH: Oman will become the first country in the Gulf to impose a personal income tax, as the oil producer works to diversify its revenue stream. 

The sultanate will impose a 5 percent levy on taxable income for individuals earning over 42,000 Omani rials ($109,091) per year starting from 2028, according to a royal decree.

The Gulf country added that the tax would apply to about 1 percent of the population. 

The move comes after Oman launched a medium-term fiscal program in 2020 to reduce public debt, diversify revenue sources, and spur economic growth, which has improved state finances. 

“The law also includes deductions and exemptions that take into account the social situation in the Sultanate of Oman, such as education, health care, inheritance, zakat, donations, primary housing,” the country’s tax authority said in a statement. 

The law was implemented following an “in-depth study to assess the economic and social impact,” and income data collected from various government entities was used to set the exemption threshold. 

“The results showed that approximately 99 percent of the population in the Sultanate of Oman is not subject to this tax,” the authority said. 

The statement added that the electronic system has been designed to enhance voluntary compliance and is linked with relevant institutions to ensure accurate calculation of individuals’ income and to verify the accuracy of submitted tax returns.

The tax will contribute to achieving social solidarity and will not include wealth, such as land ownership. It will be imposed on the annual income specified by law and includes “all cash amounts and in-kind benefits received by the individual,” the authority said. 

The move aims to complete the tax system in line with the economic and social situation in the sultanate, and the tax revenue will go toward supporting the social protection program, “with sustained cooperation,” it added. 

The move will support the objectives of Oman Vision 2040, which targets reducing dependence on oil by achieving 15 percent of gross domestic product from non-oil sources by 2030 and 18 percent by 2040. 

“It will also contribute to achieving social justice by redistributing the wealth among the segments of society, provide support to the general budget of the country, and be directed in particular to finance part of the costs of the social protection system,” the authority said. 


Saudi Arabia’s non-oil industrial production up 5.3% in 2024: GASTAT

Updated 22 min 4 sec ago
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Saudi Arabia’s non-oil industrial production up 5.3% in 2024: GASTAT

  • Industrial Production Index declined 2.3%, driven by 5.2% contraction in oil-related activities
  • Mining and quarrying sector, which includes oil extraction, saw decline of 6.8%

RIYADH: Saudi Arabia’s non-oil industrial activities posted robust growth of 5.3 percent in 2024, highlighting the success of the Kingdom’s economic diversification efforts under Vision 2030.

The overall Industrial Production Index however declined by 2.3 percent, driven primarily by a 5.2 percent contraction in oil-related activities, according to the latest report from the General Authority for Statistics.

Saudi Arabia’s growing non-oil industrial output reflects progress in diversifying revenue and jobs beyond oil, a key Vision 2030 goal. 

Reforms such as easier licensing, tax incentives, and mega projects are driving growth in manufacturing, logistics, and technology. While oil remains volatile, the expansion is showing early success in the private sector, driven by growth in foreign direct investment.

During the Davos Conference in January, Saudi Minister of Economy and Planning Faisal Al-Ibrahim said that the non-oil economy is expected to grow by 4.8 percent this year.

The latest figures from GASTAT show that manufacturing played a pivotal role in driving growth in 2024, recording a 4.7 percent annual increase. Food production expanded by 6.2 percent, while the manufacture of chemicals and chemical products,, and coke and refined petroleum goods increased by 2.8 percent.

Manufacturing played a pivotal role in driving growth in 2024, recording a 4.7 percent annual increase. File/SPA

The mining and quarrying sector, which includes oil extraction, saw a decline of 6.8 percent in 2024. This drop offsets gains in other areas, pulling the overall IPI into negative territory for the year.

The report also revealed positive trends in utilities and infrastructure-related sectors. Electricity, gas, steam, and air conditioning supply activities grew by 3.5 percent, while water supply, sewerage, and waste management services increased by 1.6 percent. 

Saudi endeavors in non-oil exports

The Kingdom’s non-oil export sector has also seen impressive growth, reinforcing diversification efforts.

According to official  data released in April, Saudi Arabia’s non-oil exports reached SR515 billion ($137 billion) in 2024, a 13 percent increase from the previous year and a 113 percent rise since the launch of Vision 2030.

This expansion spanned all export sectors, with merchandise exports rising to SR217 billion, driven by petrochemical and non-petrochemical goods.

The Kingdom now exports to over 180 countries, with 37, including the UAE, France, and Indonesia, registering record imports, solidifying its role as a growing global trade hub.