Key Saudi economic events in 9M 2024

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Saudi Arabia witnessed several major economic events during the first nine months of 2024.

 

The most notable was the announcement by Crown Prince to transfer 8% of Saudi Aramco’s total issued shares from state 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.

 

OPEC+ countries agreed to extend the oil production cut from Jan. 1, 2025, until Dec. 31, 2025.

 

The US Federal Reserve kept interest rates in the range of 5.25% to 5.50%, for the fourth time since the beginning of this year.

 

Here are the details of these events in chronological order:

 

1- Stopping contracts with foreign companies without 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- Extending Citizen Account Program and additional support until 2024-end

 

 

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- Saudi Aramco’s notification on fuel price adjustment

 

 

Several Tadawul-listed companies announced receiving a notice from Saudi Aramco on change in feedstock and fuel prices starting Jan. 1, 2024.

 

4- Valuation of mineral wealth in Saudi Arabia raised 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 (the lowest profit margin) provided by the Real Estate Development Fund on all housing projects being developed in suburbs and urban communities. It notified of 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

 

 

The 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 launched 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. Alat 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 to exempt small enterprises from paying financial compensation for 3 years

 

 

The Cabinet, chaired by King Salman, approved extending the exemption for small enterprises with a total workforce of nine workers or less, including the owner, from paying 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- Euro 5 clean diesel and gasoline fuel launched

 

 

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- Construction begins on 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-Rules approved for public entities to set up companies

 

 

The Saudi Cabinet 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 profit.

 

18- PIF launches Neo Space Group

 

 

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

 

19- Saudi Aramco’s 1.54 billion secondary public offering

 

 

 

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

 

22-OPEC+ extends oil cuts till 2025-end

 

 

OPEC+ countries agreed to extend their oil output cuts from Jan. 1, 2025, to Dec. 31, 2025. OPEC+ members are extending the voluntary oil production cuts of 2.2 million bpd until the end of November 2024, after which, the cuts will be phased out on a monthly basis as scheduled starting December 2024, stretching to November 2025.

 

21- 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.

 

22- New oil, gas discoveries in Eastern Province and Empty Quarter

 

 

Saudi Aramco announced the discovery of two unconventional oil fields, a reservoir of light Arabian oil, two natural gas fields, and two natural gas reservoirs. The unconventional oil field Al-Ladam was discovered in the Eastern Province, and the Katuf field in the Empty Quarter.

 

23- PIF launches three new renewable energy JVs

 

 

PIF signed three new agreements to localize the manufacture and assembly of equipment and components needed for solar and wind power. Renewable Energy Localization Company (RELC) – a fully owned PIF company – signed the agreements.

 

24- National minerals program established

 

 

Saudi Arabia is set to launch a new national minerals program, linked to the Ministry of Industry and Mineral Resources.

 

25- Ministry of Municipal, Rural Affairs renamed as Ministry of Municipalities and Housing

 

 

Custodian of the Two Holy Mosques King Salman issued a royal decree to change the name of the Ministry of Municipal, Rural Affairs and Housing to the Ministry of Municipalities and Housing.

 

26- Saudi Arabia submits bid for 2034 World Cup

 

 

In July, Saudi Arabia announced it submitted FIFA World Cup 2034 official bid book at a ceremony held in Paris, France. The formal bid book outlines five proposed host cities for the FIFA World Cup 2034: Riyadh, Jeddah, Al Khobar, Abha, and NEOM

 

27- Saudi Aramco to own majority stake in Petro Rabigh

 

 

Saudi Aramco signed a binding agreement to acquire an additional stake of approximately 22.5% in Rabigh Refining and Petrochemical Co. (Petro Rabigh) from Sumitomo Chemical Co., for $702 million.

 

28- Prince Mohammed bin Salman Royal Reserve Development Authority launches management plan

 

 

The Prince Mohammed bin Salman Royal Reserve Development Authority launched the reserve’s Integrated Development Management Plan, or IDMP.

 

29- Saudi Cabinet approves updated Investment Law

 

 

The Saudi Cabinet approved the Investment Law, one of the National Investment Strategy’s pillars, aligning with the Vision 2030 framework.

 

The investment law will be pivotal in achieving comprehensive development goals and diversifying the national economy's resources.

 

30- Phase 1 of Riyadh Parking PPP project launched

 

 

Riyadh Municipality launched the first phase of the Riyadh Parking public-private partnership (PPP) project to reduce unauthorised parking and enhance the urban landscape of the Saudi capital.

 

31- Saudi Arabia ranks first in UN index for e-government services in MENA 

 

 

Saudi Arabia jumped 25 places in the UN E-Government Development Index (EGDI) 2024, becoming one of the leading countries worldwide. It achieved fourth position globally, first regionally, and second among G20 countries in the digital services index.

 

32- Saudi Cabinet endorses Real Estate Transactions Tax Law

 

 

The Saudi Cabinet, in its session chaired by Crown Prince Mohammed bin Salman, approved the Real Estate Transactions Tax Law.

 

The Cabinet also approved the Commercial Register Law and Trade Names Law.

 

33- Fed cuts interest rates by 50 bps, expects further cut by year-end

 

 

The US Federal Reserve lowered interest rates for the first time since 2020, putting an end to the tightening policy, which began in March 2022. A further cut is expected by year-end. Due to the riyal-dollar peg, the Saudi Central Bank (SAMA) slashed the reverse repo and repo by 50bps.

 

34- First project to store natural gas by injecting processed gas

 

 

Saudi Arabia began operations at Hawiyah Gas Storage (HGS) plant, the Kingdom’s first project to store natural gas by injecting processed gas.

 

35- Saudi Arabia’s budget estimate for 2025

 

 

Total revenues is estimated at SAR 1.18 trillion and expenditures are seen to reach SAR 1.28 trillion.

 

Revenue for 2024 is forecast to reach SAR 1.23 trillion, expenditure at SAR 1.35 trillion, and a deficit of SAR 118 billion.