Key Saudi economic events in H1 2024

The Saudi economy witnessed several major events during the first half of 2024.

 

The most notable was the Crown Prince's announcement of transferring  8% of Saudi Aramco’s total issued shares from the Kingdom’s ownership to fully-owned subsidiaries of the Public Investment Fund (PIF).

 

Additionally, the Saudi government and Saudi Aramco announced a secondary offering of 1.54 billion ordinary shares, representing about 0.64% of the company's issued shares.

 

In Q1 2024, Saudi Arabia raised the valuation of its mineral wealth from SAR 4.9 trillion to SAR 9.4 trillion and launched the geographic survey project for renewable energy projects in Saudi Arabia.

 

OPEC+ agreed to extend oil production cuts from Jan. 1, 2025, to Dec. 31, 2025. Meanwhile, the US Federal Reserve kept interest rates unchanged at 5.25-5.50% for the fourth time this year.

 

Here are the details of these events in chronological order:

 

1- Suspension of contracts with foreign companies without a regional headquarters in Saudi Arabia

 

 

The decision of suspension was effective as of Jan. 1, 2024, and included agencies, institutions, and funds affiliated with the government or any of its entities.

 

2- Extension of the Citizen Account Program as well as the additional support until the end of 2024

 

 

The Custodian of the Two Holy Mosques directed the extension of the Citizen Account Program with its current mechanism, along with continuing to provide additional support to the program's beneficiaries until year-end, while keeping the program open for registration.

 

3- Several listed companies receive notice from Aramco on fuel price adjustment

 

 

Several Tadawul-listed companies announced receiving notice from Saudi Aramco to adjust feedstock and fuel prices starting Jan. 1, 2024.

 

4- Increase in valuation of mineral wealth in Saudi Arabia to SAR 9.4 trillion

 

 

The Minister of Industry and Mineral Resources, Bandar Alkhorayef, announced that Saudi Arabia raised the valuation of its mineral wealth from $1.3 trillion (SAR 4.9 trillion) in 2016 to $2.5 trillion (SAR 9.4 trillion).

 

5- Implementation of reduced mortgage financing without salary cap

 

 

National Housing Co. announced the application of the reduced financing rate "lowest profit margin" provided by the Real Estate Development Fund on all housing projects being developed in suburbs and urban communities, with rates up to 2.59% without a salary cap for the first 10,000 off-plan sales contracts with four local banks.

 

6- No intention to impose personal income tax

 

 

Finance Minister Mohammed Al-Jadaan ruled out plans to impose personal income tax in Saudi Arabia. There is VAT, income tax on companies and foreign investors, and local zakat, with no intention for a change.

 

7- Launch of the National Biotechnology Strategy

 

 

Crown Prince launched the National Biotechnology Strategy to enhance the Kingdom's position as a leading country in the industry. The strategy will focus on improving national health, raising the quality of life, protecting the environment, achieving food and water security, maximizing economic opportunities, and localizing promising industries, while contributing to the goals of Vision 2030.

 

8- Saudi Arabia launches first savings product for individuals

 

 

The Ministry of Finance and the National Debt Management Center announced the launch of the first government-backed savings product for individuals, named (Sah), derived from the initials of the phrase (government sukuk) in Arabic.

 

9- Launch of Alat Co.

 

 

Crown Prince announced setting up Alat Co., one of the PIF's companies, to be a new national leader. The company aims to make the Kingdom a global hub for sustainable industries with a focus on advanced technology and electronics.

 

10- Launch of Contractor Financing Program in partnership with National Infrastructure Fund

 

 

 

PIF in partnership with the National Infrastructure Fund, launched the Contractor Financing Program.

 

11- Approving guidelines for offering real estate contribution certificates

 

 

The Capital Market Authority (CMA) approved the instructions for offering real estate contribution certificates and amended the rules for offering securities and continuous obligations and the list of terms used in the authority's regulations and rules, effective from the date of publication.

 

12- Extension of the decision to exempt small enterprises from paying financial  compensation for 3 years

 

 

The Cabinet, chaired by King Salam, approved extending the exemption for small enterprises with a total workforce of nine workers or less, including the owner, from paying the financial compensation for three years.

 

13- Significant increase in confirmed gas and condensate reserves in Jafurah field

 

 

Minister of Energy, Prince Abdulaziz bin Salman, said  Saudi Aramco added significant quantities to the confirmed reserves of gas and condensates in the unconventional Jafurah field.

 

14- Completion of Euro 5 clean diesel and gasoline fuel launch in the Kingdom

 

 

The Ministry of Energy announced finalizing the launch of clean diesel and gasoline (Euro 5) in the Kingdom’s markets, to replace the existing diesel and gasoline fuels.

 

15- Transfer of 8% of Aramco shares to portfolios of PIF companies

 

 

Crown Prince Mohammed bin Salman announced transferring 8% of Saudi Aramco’s issued shares to wholly owned portfolios of the PIF.

 

16- Commencement of constructing Ceer Automotive EV facility

 

 

Ceer was awarded a project to develop a nearly SAR 5 billion EV manufacturing facility in King Abdullah Economic City.

 

17-Approval of rules for handling requests from public entities to set up companies

 

 

The Saudi Cabinet, chaired by Crown Prince Mohammed bin Salman, approved rules for handling requests from public entities to set up companies, participate in their establishment, or set up any entity whose purposes include investment or making profits.

 

18- US Fed holds rates steady for seventh straight time

 

 

The US Federal Reserve decided, during its policy meeting held on June 11-12, to fix interest rates at the 5.25-5.50% range for the fourth time since the beginning of this year.

 

19- Q1 budget: Revenues at SAR 293.4B and expenditures at SAR 305.8B

 

 

The actual revenues for the first quarter budget reached SAR 293.4 billion, while general expenditures totaled SAR 305.8 billion, resulting in a budget deficit of SAR 12.4 billion.

 

20- PIF launches Neo Space Group

 

 

The PIF announced the establishment of Neo Space Group (NSG), wholly owned by the fund, poised to become a national champion in the Saudi satellite and space sector.

 

21- Aramco launches 1.54B secondary public offering

 

 

The Saudi government and Saudi Aramco announced the launch of the secondary public offering of 1.54 billion ordinary shares by the government, representing approximately 0.64% of its issued shares.

 

22-OPEC+ extends oil cuts till 2025-end

 

 

OPEC+ agreed to extend their oil output cuts from Jan. 1, 2025, to Dec. 31, 2025.

 

23- Saudi Arabia launches geographical survey project for renewable energy sites

 

 

The Ministry of Energy launched the geographical survey project for renewable energy sites and awarded contracts to Saudi companies to install 1,200 stations for measuring solar and wind energy across all regions of the Kingdom.