Saudi Arabia’s Industrial Growth Rises in January, Fueled by Manufacturing
RIYADH: Saudi Arabia’s industrial production index (IPI) showed a year-on-year growth of 1.3% in January, owing to the manufacturing and waste management growth, according to the General Authority for Statistics. The index for the month of January was the same as that of the month of December at 103.9%.
Manufacturing sub-index grew 4% yearly, because of the 4.3% rise in coke and refined petroleum products and 4.2% increase in chemicals and chemical products. Manufacturing recorded a monthly rise of 0.3% as coke and refined petroleum products saw a surge of 0.1% and chemicals rose by 0.5%.
Mining and quarrying activity experienced a drop of 0.4% year on year due to the reduced oil production, resulting to 8.92 million barrels per day, a drop from 8.96 million in January 2024. The sector recorded a slight month-on-month rise by 0.1%.
However, other manufacturing sectors reflected mixed outcomes. Non-metallic mineral products showed an annual increase of 6.9% and a monthly increase of 1.7% whereas basic metals manufacturing showed year on year decline of 0.7% but rose by 0.5% monthly. Paper product manufacturing saw an annual increase of 5.1% but dropped by 0.1% from December. Electrical devices manufacturing saw a yearly growth of 9.2% and monthly progress of 0.7%. Furniture manufacturing also saw an annual decline of 1.5% and monthly decline of 0.4%.
The waste management sector experienced an annual growth of 8.7%, however, electricity, gas, steam, and air conditioning supply fell by 1.7%.
This industrial growth supports Vision 2030’s goals to diversify its economy by developing non-oil sectors like petrochemicals, mining, and renewable energy.
S&P raises Saudi Arabia’s rating as Economy Expands Beyond Oil
RIYADH: Global ratings agency S&P raised Saudi Arabia’s credit rating from ‘A’ to ‘A+’, stating the kingdom’s continuous economic transformation as a major contributing factor. The report points out Vision 2030, which intends to lessen Saudi Arabia’s reliance on oil by developing sectors such as construction, logistics, manufacturing, and mining. This diversification is expected to upbring GDP growth between 2025 and 2028.
S&P stated that Saudi Arabia might cut back on capital expenditure and related spending in 2025. However, it is expected that the investments under Vision 2030 will increase domestic consumption and economic productivity, particularly among the country’s youthful population.
Recently, Saudi Arabia’s Public Investment Fund signed a $3 billion MoU with SACE, Italy’s state export credit agency, for assistance with debt management.
S&P cautioned that Saudi Arabia’s sensitivity to oil prices may continue to affect fiscal and external stability until 2028. Furthermore, Oil revenue is expected to decline due to Aramco’s lowering dividends.
According to the report, Saudi Arabia is positioned as a key player in the global energy market due to its significant hydrocarbon reserves and low-cost oil production. Saudi Arabia maintains the capacity to efficiently manage oil production levels to maintain global prices, as the kingdom is world’s largest swing oil producer and has a key influence within OPEC+.
Makkah’s Licensed Hospitality Facilities Rise 80% in 2024
RIYADH: Makkah had 1030 licensed hospitality facilities by the end of 2024, an 80% rise from 2023, according to Saudi Arabia’s Ministry of Tourism. This growth is a proof that the region is committed to providing its visitors better experiences and services for Umrah pilgrims.
Makkah, now with the highest number of licensed hospitality facilities, holds the top spot in the kingdom. The Ministry of Tourism has shown its commitment to protecting the rights of the tourists by carrying out routine inspections to ensure compliance with licensing requirements and penalizing if there are any violations.
The hospitality sector in Saudi Arabia is growing beyond Makkah as well. The total number of licensed facilities exceeded 3,950 by Q3 of 2024, indicating 99% increase over the same period in 2023. The number of licensed rooms increased by 107% from the previous year, totaling 443,000.
According to CoStar, Makkah and Madinah will have 17,646 and 20,079 rooms in different phases of development by 2025.
Saudi Arabia’s tourism sector is on the rise with inbound tourists increasing from 27.4 million in 2023 to 30 million in 2024. The kingdom aims to draw in 150 million tourists annually by 2030 to increase tourism’s contribution to GDP from 6% to 10%.
Makkah’s hospitality facilities reached 816 before the 2024 Hajj season, with 227,000 rooms for pilgrims. Authorities introduced improved crowd control, digital meal distribution and extended electric golf cart services to enhance the experience for the pilgrims.
Saudi Arabia’s E-Commerce Sales Climb 45% in January, Hitting $5.5bn
RIYADH: Saudi Arabia’s e-commerce sector experienced an increase in January in Sales via Mada cards, a 44.64% year on year increase, reaching SR20.87 billion ($5.56 billion), according to the data from the Saudi Central Bank (SAMA). This growth shows the kingdom’s increasing reliance on digital payments.
Transaction volume increased by 33.65%, reaching 111.42 million, including online shopping, in-app purchases, and e-wallet transactions and excluding Visa and MasterCard credit card payments.
Mada, Saudi Arabia’s national electronic payment network, has been crucial in fueling this growth. Mada’s usage has grown due to increased consumer spending, enhanced economic conditions and increased use of NFC-enabled devices, as it offers the users secure transactions via near-field communication (NFC) technology.
Along with online sales, point of sale (POS) transactions at outlets also rose by 8.19% annually, reaching SR58.21 billion. The number of POS transactions increased by 13.10%.
Restaurants, cafes, and food outlets accounted for 30% of POS sales, reaching an approx. SR8.7 billion. Miscellaneous goods and services spending reached SR7.07 billion, whereas jewellery sales grew the most at 24.71%, amounting to SR1.19 billion. Spending on clothes and footwear rose by 14%, reaching SR3.68 billion.
The growth in e-commerce and POS transactions is a result of the rising consumer spending, festive offers and development in the digital payment system, which is helping Saudi Arabia’s shift to a cashless economy.
