The Kingdom of Saudi Arabia has seen inflation increase from 1.5% in December 2023 to 1.6% in January 2024.

Price Increase:

The General Authority for Statistics (GASTAT) announced in a report that the monthly consumer price index was influenced by a 1.1% increase in prices for housing, water, electricity, gas and fuel.

The increase was mainly due to the uptick in housing and rent prices, where the market saw a 1.2% increase.

The price of refined petroleum products increased by 12% compared to last year.

This rise in the wholesale price index was driven by basic chemical prices which went up by 34%

Food and beverage prices increased by 0.3% while restaurant prices increased by 0.2% while prices for personal goods decreased by 0.5% in January compared to December.

Additionally, compared to January of 2023, housing, water, electricity, gas and other fuel prices increased by 7.8% last month.

Price decline:

The Price of furnishings, maintenance and household equipment decreased by 3.3%.

The price of clothing and footwear dropped by 4.1%.

Transport and delivery fees decreased by 1.1%.

Quotes:

Announced in the GASTAT report, “Prices for rents were the main driver of the inflation rate in January 2024 due to their high relative importance in the Saudi consumer basket with a weight of 21%”

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The country has topped the United Nations Tourism ranking for the growth of international tourist arrivals in 2023 compared to 2019 among the countries hosting major tourism destinations.

Saudi Arabia saw a 56% rise in inbound tourism in 2023, compared to 2019, as per the January report by the United Nations Tourism.

The report also indicated that the Kingdom has achieved a remarkable tourism recovery rate of 156 percent in the number of tourist arrivals during the year 2023 compared to 2019.

The tourism sector in Saudi Arabia has achieved remarkable success and played a vital role in positioning the country as a leader in the Middle East region’s global tourism recovery. In fact, the Mideast region has outdone all other regions by surpassing pre-COVID-19 growth levels and achieving a 122 percent recovery rate in international tourist arrivals during the year 2023, compared to the year 2019.

According to the UN Barometer report, there was a noticeable increase in inbound and domestic visitors to several tourist destinations in the Kingdom in 2023.

According to the balance of payments data issued by the Saudi Central Bank (SAMA), inbound tourists and visitors spent over SR100 billion in Saudi Arabia during the first three quarters of 2023. This marks a new record for the country in terms of tourist spending.

According to a UN report, the Kingdom’s tourism industry has experienced a significant increase in the number of tourist arrivals. This growth is attributed to the country’s diverse and attractive tourism options, which have garnered the confidence of travelers worldwide..

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Saudi Arabia has recently attracted around $13 billion in private investments for its developing tourism industry, positioning the country as an upcoming travel destination.

These investments are expected to bring in between 150,000 to 200,000 new hotel rooms within the next two years, as part of the country’s ambitious plans to expand its tourism offerings.

Princess Haifa Al Saud, Saudi Deputy Minister of Tourism, mentioned in an interview with Bloomberg that the Kingdom aims to increase tourism revenues to $85 billion this year, up from around $66 billion in 2023.

This initiative aligns with Crown Prince Mohammed bin Salman’s broader economic vision, which seeks to diversify the nation’s income streams beyond oil and include sectors like sports and technology.

Currently, the tourism sector contributes 4.5% to the GDP, and the country aims to increase its contribution to 10% by 2030 by including ways to add a to Boost in tourism.

The government is investing heavily in large-scale development projects such as the Qiddiya Entertainment City and has also made significant investments in football, further enhancing its global appeal as a travel destination.

Saudi Arabia is the only bidder for hosting the 2034 World Cup. In 2023, the country welcomed 100 million tourists, mostly domestic travelers, with international visitors accounting for about 27 million.

The majority of these arrivals were for religious or business purposes, although leisure travel is expected to increase as several major tourism projects are still underway.

The government’s vision is to secure up to $80 billion in private tourism investment by 2030, along with a plan to invest about $800 billion in the sector over the next decade.

More on Vision2023:

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Jubail, a member of UNESCO’s Global Network of Learning Cities in Saudi Arabia, is set to host the sixth International Conference on Learning Cities from December 3rd to 5th. 

During the announcement on Thursday, Isabell Kempf, the director of the UNESCO Institute for Lifelong Learning, emphasized the unique position of UNESCO learning cities to instill climate consciousness and equip local residents with the necessary green skills for a sustainable society. 

The event will take place at the offices of the Royal Commission for Jubail and Yanbu in the Jubail Industrial City, which is preparing to celebrate its 50th anniversary. 

King Salman will be the patron of the conference, in keeping with his views on the importance of international cooperation in efforts to confront global challenges and achieve sustainable development through education. 

The conference provides an opportunity to exchange experiences and ideas with cities around the world and develop joint action plans to enhance the role of learning cities in facing global challenges, especially climate change. 

Jubail was chosen to host the conference in recognition of its commitment to the event, the initiatives it has developed to enhance lifelong learning opportunities for all, and its active participation in the network since joining in 2020. 

In 2021, Jubail Industrial City received the UNESCO Learning Cities Award for its efforts to enhance sustainable development, boost entrepreneurship, and improve skills, in keeping with the spirit of the network. 

The theme of the conference will be “Learning Cities at the Forefront of Climate Action,” which aligns with the aims of the Saudi and UNESCO’s commitment to sustainable development. Middle East Green Initiatives launched in 2021 by Crown Prince Mohammed bin Salman, chairman of the Supreme Committee for Green Saudi Arabia.  

“The UNESCO Learning City pointed to national programs launched as part of the Saudi Vision 2030, such as the Human Capability Development Program, aimed at building a national strategy for the development of citizens’ capabilities,” the Institute for Lifelong Learning said.  

“Adopting a lifelong-learning perspective and involving the participation of government agencies, the private sector and the non-profit sector, this strategy stretches from early childhood through to general education, The upcoming conference in December will bring together municipal officials, people interested in the field of learning and education, and representatives of the UNESCO Global Network of Learning Cities. The goal of the conference is to exchange information, ideas, solutions, and best practices that promote lifelong learning, which includes university education, technical and vocational training, and continuous training.  

The UNESCO Global Network of Learning Cities is composed of 356 cities in 79 countries that promote learning within families and communities, facilitate learning in the workplace through modern technologies, and foster a culture of lifelong learning among member cities. This helps promote individual empowerment, social inclusion, economic development, cultural prosperity, and sustainable development.  

The Institute for Lifelong Learning said that during the conference, participants, including policymakers, learning city mayors, lifelong learning and sustainability experts, private-sector representatives, NGOs, civil society, researchers, educators, and United Nations entities, will work together to identify and strengthen lifelong learning policies for climate action, resilience, and the establishment of sustainable cities. 

More on Vision2030:

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According to an analysis of General Authority for Statistics data by the Ministry of Economy and Planning, non-oil activities in Saudi Arabia reached a milestone, achieving a 50% share of the country’s real GDP in 2023, the highest level ever recorded. 

This translates to a non-oil economy worth SAR1.7 trillion (approximately $453 billion) at constant prices, powered by consistent growth in investment, consumer spending, and exports. 

The significant contribution from non-oil sectors is attributed to a surge in private-sector investment over the past two years, with a growth rate of 57%. 

The report states that this growth pushed private investment to a record high of SAR959 billion ($254 billion) in 2023, with arts and entertainment activities leading the pack with an exceptional 106% growth between 2021 and 2022. 

Other sectors such as accommodation, food services, transportation, and storage also witnessed robust growth, expanding by 77% and 29%, respectively. 

The ministry stated in its report that “the growth in non-oil activities during 2023 is noteworthy for its diversity and momentum across various sectors. 

Social services, including healthcare, education, and entertainment, saw a 10.8% increase, followed by transportation and communication (3.7%) and trade, restaurants, and hotels (7%).” 

Real service exports, primarily driven by tourist spending, have skyrocketed over the past two years, experiencing a growth rate of 319%. 

This reflects the significant impact of Saudi Arabia’s transformation into a global tourism and entertainment destination, further propelling economic diversification and growth engines. 

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Arcapita Capital Company, a subsidiary of Arcapita Group Holdings Limited, announced on Wednesday that it has closed KSA Logistics Fund III for SAR1.8 billion ($500 million).

The fund was backed by a leading sovereign wealth fund from the GCC region and other major institutional investors.

Arcapita Group has already invested a significant portion of the fund in a portfolio of industrial real estate assets across the manufacturing and warehousing sectors.

The company plans to invest the rest of the fund in strategically located assets across Riyadh, Jeddah, and the Eastern Province.

Arcapita will also develop long-term off-take arrangements with tenants, by taking a built-to-suit approach.

This fund is in alignment with Arcapita’s strategy of bringing its international expertise in industrial real estate to the Kingdom’s industrial sector to support its ambitions of becoming a global logistics hub.

Hisham Al Raee, Deputy CEO of Arcapita Group, said, “Today marks an essential milestone in our strategic expansion in Saudi Arabia, the largest economy in the MENA region.

We currently manage over SAR3.8 billion ($1 billion) of industrial warehousing assets in KSA and the GCC region, and our investor base includes pension funds, sovereign wealth funds, and financial institutions.

The industrial and logistics sectors are key components of the Kingdom’s Global Supply Chain Resilience Initiative, which aims to attract SAR 40 billion ($10.6 billion) in investments.

We look forward to continuing to deploy our expertise in the industrial real estate sector to play a key role in transforming the Kingdom into a global logistics hub.”

Yousif Al Abdulla, Managing Director and Head of MENA Investment at Arcapita Group, has expressed his optimism towards the growth of Saudi Arabia’s industrial real estate market.

He believes that the market will experience substantial growth over the long term, driven by the significant and continued growth of e-commerce across the Kingdom and by strong government-led investment in infrastructure and the industrial sector.

Arcapita Group’s portfolio strategy will leverage opportunities presented by the National Industrial Development and Logistics Program, as well as the Kingdom’s Vision 2030 plan.

Arcapita Group’s management team has managed more than SAR24.3 billion ($6.5 billion) in industrial and logistics real estate transactions globally, including over SAR5.6 billion ($1.5 billion) in the GCC region, over the past 25 years. Furthermore, Arcapita Group has a strong track record of investing in the Kingdom, with nearly SAR1.5 billion ($400 million) in investments over the past 10 years.

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According to the Sovereign Wealth Fund Institute, the Public Investment Fund (PIF) of Saudi Arabia has seen a significant increase in its total assets, reaching $940.26 billion after a surge of $163.6 billion.

This growth can be attributed to Saudi Arabia’s decision to transfer an 8% stake in oil giant Aramco to the portfolio companies of the PIF. As a result, the PIF has risen to become the fifth-largest Sovereign Wealth Fund worldwide.

The value of the stake transferred was estimated at $163.6 billion based on Aramco’s market capitalization, according to LSEG data.

The PIF directly owns a 4% stake in Aramco, which was transferred in 2022, and an additional 4% indirectly, which was transferred last year to its wholly owned unit Sanabil Investments.

The four largest Sovereign Wealth Funds globally are the Norway Government Pension Fund Global ($1.65 trillion), China Investment Corporation ($1.35 trillion), SAFE Investment Company ($1.09 trillion), and Abu Dhabi Investment Authority ($993 billion).

Following this latest transfer, the state now holds an 82.186% stake in Aramco.

About Saudi Aramco outside of the PIF transfer:

Saudi Aramco, based in Dhahran, Saudi Arabia, is the world’s largest oil producer. The company is primarily state-owned and has been officially named the Saudi Arabian Oil Company. It is considered the world’s most profitable company, surpassing even tech giants such as Apple (AAPL) and Alphabet’s Google (GOOGL).

In 1933, the Saudi Arabian government and the Standard Oil Company of California signed a concession agreement, which led to the establishment of Saudi Aramco. The company started drilling operations soon after and began commercial oil production in 1938.

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According to the state-owned Saudi Press Agency, the international technology conference LEAP 24 has attracted investment deals worth $888 million. 

The investments include funds for venture capital and start-ups and are intended to support innovation and tech entrepreneurship in the region.  

Investcorp launched a $500 million fund to target Saudi businesses in their growth stages. 

 The National Development Fund and the Social Development Bank established the $40 million Gaming and Esports Investment Fund, managed by Impact46. 

Merak Capital also established an $80 million fund to back game accelerators in the kingdom.  

Furthermore, another fund worth $50 million was launched by Takamol Holdings to support early-stage firms, while Plug and Play and X by Unifonic announced two more funds to support technology start-ups and business software services for young businesses.  

In addition, Saudi-based start-ups raised a total investment of $53.4 million. Among them, BRKZ, an international information technology firm secured $8 million in a Series A round. 

 FanZ, an AI-enabled sport tech secured $1.5 million in pre-seed funding, and Lawazem, an online B2B supplies player secured $8 million, among many others. 

About LEAP 2024: 

LEAP 2024 was a highly successful technological conference that attracted 50,000 guests from outside the Kingdom.  

Al-Khamisi proudly declared it as the most attended conference of its kind in the world, with a total of 215,000 visitors. 

This contributed to a surge in hotel occupancy rates in Riyadh, which reached 99 percent during the conference. Furthermore, many new projects were announced at the event. 

investments totaling $13.4 billion, showcasing the Kingdom’s growing economy in the global tech landscape. 

 Read More about LEAP 2024

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The Saudi Tourism Authority (STA) has signed an MoU with Switzerland Tourism to bolster collaboration in the tourism sector.

According to SPA, a first-of-its-kind Memorandum of Understanding (MoU) has been signed between the tourism entities of Saudi Arabia and Switzerland. The objective of this agreement is to promote the development of the tourism industry, facilitate mutual promotion, and enable collaborative tourism projects between the two countries.

This agreement sets a new precedent for international tourism cooperation.
The report emphasizes that particular tourism sectors like marine activities, culture and heritage, and rural tourism will receive special attention. This will be done through combined marketing efforts to attract travelers who are seeking unique experiences.

This will be achieved through amplified cooperation between local tourism agencies and operators, providing opportunities for further partnerships and value between Saudi Arabia and Switzerland.

The strategic promotion aims to showcase KSA and Switzerland as leading destinations for tourism that cater to every tourist.
Additionally, Switzerland Tourism and STA will collaborate to leverage alternative technology in the industry and provide visitors with a more seamless travel experience.

Livio Goetz, lead of management of gulf countries in ST said “Saudi Arabia holds great importance as a key market for ST, being the largest market within the GCC. Notably, 40% of all overnight stays in the GCC are generated from Saudi Arabia”.

“Last year, the number of visits from Switzerland to Saudi Arabia increased by 84%. This new agreement will build on that progress with increased collaboration that unlocks valuable growth opportunities for both countries,” he noted.

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Saudi Arabia has recently increased its stake in oil giant Aramco by transferring an 8% stake to the Public Investment Fund.

With this move, the PIF’s direct and indirect holding in Aramco has doubled, which is a part of the kingdom’s plan to reduce its reliance on oil and diversify its economy.

According to LSEG data, this stake is worth around $163.6 billion based on Aramco’s current market capitalization.

The PIF already owned a 4% stake in Aramco, which was directly transferred in 2022, and another 4% indirectly transferred to Sanabil, which is wholly owned by PIF.

Reuters had previously reported that Saudi Arabia is planning to sell more shares of Aramco, which will help finance the Kingdom’s Vision 2030 program. Aramco raised a record $29.4 billion from its initial public offering before the pandemic.

The PIF declined to comment on which entities the shares would be transferred to. However, the transfer is in line with Saudi Arabia’s long-term initiatives to diversify the national economy, expand investment opportunities, and boost the country’s economy.

More on Saudi Aramco:

According to the state news agency SPA, Crown Prince Mohammed bin Salman, who chairs PIF, stated that “the transfer will also solidify PIF’s strong financial position and credit rating.”

PIF is the centerpiece of the de facto ruler’s ambitious plan to diversify the economy by building “giga projects” and new industries.

It has transformed from a sleepy sovereign investor into a global investment vehicle that makes multi-billion-dollar bets on various sectors such as technology and sports.

PIF invested $31.5 billion last year, making it the world’s top spending sovereign wealth fund. Before the new transfer, it had roughly $700 billion in assets under management.

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