Key benefits
Saudi Arabia offers a dynamic and robust economy, perfect for serving the world’s most demanding markets.
Dynamism and growth.
The performance of both Saudi Arabia and MENA’s economies have exceeded world growth. Meanwhile, Saudi’s non-oil sector has delivered accelerating growth rates as the economy diversifies.
Encouraged by robust GDP growth and macroeconomic stability, consumer confidence is well above the regional average. Growing private credit and increased public expenditures on infrastructure and other projects provide a broad basis for robust opportunities across the Middle East, but in Saudi Arabia these are translating into particularly strong and sustained growth in domestic demand KSA itself has never been more committed to supporting economic growth. Robust growth in government revenues is supporting double-digit increases in government expenditures on social, infrastructure, and other investment projects. Perhaps even more crucial in the long term, an increasingly deregulated and competitive economic environment is supporting an explosion of business formation as the private sector takes an increasingly prominent role in the economy.
Foreign investment
The variety of domestic and export-oriented investment opportunities in Saudi has attracted steadily increasing foreign direct investment as the economy has been progressively opened. UNCTAD’s World Investment Report recorded FDI inflows into the Saudi economy totaling US$18 billion in 2006, making Saudi Arabia the top FDI destination in the Arab world and one of the Top 20 in the world.
Economic stability
Sound macroeconomic management and an inflection point in world energy markets have made the KSA’s economy stable, despite the global financial crisis. Saudi Arabia’s economy ranks 3rd in the world for macroeconomic stability as a result of “a healthy fiscal environment, relatively low interest rates, and inflation that has been kept under control.”
The International Monetary Fund’s 2008 World Economic Outlook notes that “regional growth remains strong” as “global financial market turmoil has had little direct effect on the Middle East.” While much of the world economy has recently been affected by a global liquidity squeeze, Saudi Arabia’s twin surpluses in the government budget and current account have made KSA an attractive, high-liquidity environment for local and foreign ventures.
Market size
As the region’s largest economy and the world’s 24th largest exporter, the sheer size of the markets that Saudi-based projects serve is “a competitive advantage, allowing Saudi businesses to benefit from economies of scale.” With excellent access to Saudi and other MENA markets, as well as the advanced and emerging economies of nearby Europe and Asia, market exposure for Saudi-based projects is not only vast but also highly diversified.
Cluster development
Investors in Saudi Arabia enjoy increasingly well-developed business clusters and value chains that set the nation apart from its neighbors and from other emerging economies. The World Economic Forum ranks the Kingdom 39th in the world for Local Supplier Quantity and 35th for both Value Chain Breadth and Production Process Sophistication. Well established, competitive and efficient, Saudi Arabia’s domestic industries—from energy and chemicals to transportation—provide industrial projects with exceptional opportunities for cost savings.