GCC central banks hold interest rates steady for 6th time following Fed’s move
Updated 12 May 2024
Reina Takla REEM WALID
RIYADH: Gulf Cooperation Council central banks have held interest rates steady for the sixth time as the US Federal Reserve keeps its benchmark level between 5.25 percent and 5.50 percent.
As most currencies in the region are pegged to the US dollar, monetary policy follows the decisions taken in Washington, with policymakers opting to lock the rate at the level it has been since July.
The freeze comes as the rate-setting panel cites “a lack of further progress toward the committee’s 2 percent inflation objective.”
Vijay Valecha, chief investment officer at Century Financial, told Arab News: “This decision marks the sixth consecutive time that the central bank has chosen to keep rates unchanged. Market expectations have adjusted, now forecasting only one rate cut by year-end compared to the six anticipated at the beginning of 2024.”
He added: “The monetary policies of most central banks in the GCC countries, including the UAE, Saudi Arabia, Bahrain, Oman, and Qatar, typically mirror those of the Fed due to their currencies being pegged to the US dollar. Kuwait is the exception in the bloc, as its dinar is linked to a basket of currencies.”
Valecha continued by stating that as a result, interest rates in GCC markets are also anticipated to remain stable in the near future, which bodes well for the profitability of GCC banks.
This decision implies that the Saudi Central Bank, also known as SAMA, will maintain its repo rates at the current level of 6 percent.
The UAE central bank, along with Kuwait, Qatar, Oman, and Bahrain, also mirrored the Fed’s move.
Repo rates, which represent a form of short-term borrowing primarily involving government securities, underscore the close economic ties and financial dynamics between the GCC countries and the global economic landscape, particularly the US.
The US central bank also stated that it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
This indicates that rate cuts are not on the cards anytime soon, until inflation cools down and moves sustainably toward the 2 percent target set by the US Fed.
Startup valuation adjustment reflects dynamic period of growth in KSA, VCs say
Updated 23 sec ago
Nour El-Shaeri
RIYADH: Saudi Arabia’s startup ecosystem is undergoing a remarkable transformation, driven by increasingly attractive valuations and a surge in early-stage investment activity.
The Kingdom is establishing itself as a leader in venture capital funding across the Middle East and North Africa region, with government-backed initiatives, economic reforms, and digital transformation playing pivotal roles.
As valuations – once inflated by significant capital inflows – adjust to more reasonable levels, early-stage rounds are becoming particularly appealing to both regional and international investors.
In the first half of the year, 84 percent of total transactions in Saudi Arabia came from early-stage investments, a rise from 82 percent on the previous 12 months, with series A transactions increasing to 14 percent from 10 percent, according to venture data platform MAGNiTT.
The current state of valuations
In an interview with Arab News, Tushar Singhvi, deputy CEO at Crescent Enterprises, said that the current state of valuations in Saudi Arabia reflects a “dynamic period of growth.”
He acknowledged that while some valuations had become “excessively high” due to the substantial influx of venture capital, they have since moderated, offering more “reasonable levels,” which in turn create “attractive opportunities for investors.”
The executive added: “Although some valuations might still appear inflated, the strong underlying fundamentals and significant growth potential of these businesses justify these prices.”
Tushar Singhvi, deputy CEO at Crescent Enterprises. (Supplied)
Saudi Arabia led the MENA region in venture capital funding during the first half of 2024, with a total of $412 million, Singhvi highlighted.
“Additionally, foreign investments in Saudi Arabia rose by 12 percent year-on-year to $640 billion by the end of 2023, highlighting sustained investor confidence,” he added.
In agreement, Bundeep Singh Rangar, CEO of Fineqia and managing partner of Glass Ventures, emphasized that Saudi Arabia’s startup ecosystem is showing resilience.
“While the broader MENA region has seen a decline in venture capital funding, Saudi Arabia’s ecosystem remains resilient,” he said, noting that even with a slight year-on-year dip in funding, investor confidence remains high, particularly in sectors like fintech and e-commerce.
Rangar explained that the maturation of the Saudi startup ecosystem is increasingly aligning with “global standards,” making the valuations justifiable as the market sentiment continues to strengthen.
Underlying factors
Several key factors have driven investors’ increased interest in early-stage rounds in Saudi Arabia. Singhvi points to the Kingdom’s “vast market potential” supported by Vision 2030, which has catalyzed a wave of innovation and entrepreneurship.
Significant government support, such as initiatives from Monsha’at and the Public Investment Fund, have played a crucial role, while infrastructure spending has created new opportunities across multiple sectors.
“The ongoing digital transformation in the Kingdom has further enhanced its attractiveness,” Singhvi remarked, adding that digitally enabled businesses are well-positioned to capture the growth opportunities emerging from this transformation.
Bundeep Singh Rangar, CEO of Fineqia and managing partner of Glass Ventures. (Suppied)
Rangar also highlights the impact of Vision 2030, noting that the government’s proactive efforts, including initiatives like the LEAP conference where billions are being invested in tech, are creating fertile ground for early-stage investments.
He said: “The growing demand for technology-driven solutions in sectors like fintech, coupled with an 83 percent year-on-year rise in non-mega funding, makes early-stage investments particularly attractive to both local and international investors.”
Singhvi also stated that investor participation has grown significantly, with Saudi Arabia accounting for 54 percent of MENA’s total venture capital funding in the first half of the year, up from 38 percent in 2023.
Valuations and M&A
One significant outcome of these more attractive valuations is the potential for increased mergers and acquisitions activity within Saudi Arabia’s startup ecosystem.
Singhvi predicts “unprecedented growth” in the M&A market, noting that Saudi Arabia led the Middle East in M&A activity in the first quarter of 2024 and is projected to reach a transaction value of $4.8 billion by year-end.
“The startup sector is expected to see similar positive activity, with more realistic valuations making them more appealing to potential investors,” he remarked.
Rangar concurs, explaining that as valuations become more aligned with market norms, mature startups are likely to consolidate their positions and scale via strategic acquisitions.
He cited RasMal’s recent acquisition of UAE’s Pentugram as an example of how favorable valuations can facilitate cross-border deals that strengthen the regional influence of Saudi startups.
Future outlook
The trend of appealing early-stage rounds is likely to continue, according to both Singhvi and Rangar.
Singhvi emphasized that Saudi Arabia’s commitment to Vision 2030 creates a “stable and supportive environment for startups,” particularly in key sectors like fintech, e-commerce, health tech, ed tech, and renewable energy, which are expected to continue attracting significant investment.
He pointed to the Kingdom’s economic stability and the net inflow of foreign direct investments, worth $3.49 billion in the last quarter of 2023, as further reinforcing investor confidence.
Rangar also pointed out that rising investor participation – up 16 percent in the first half of 2024 – reflects a robust appetite for early-stage investments and suggests this trend will persist, supported by continued government backing and the availability of capital.
Optimism amongst investors
Positivity about the future of Saudi Arabia’s startup ecosystem is shared widely among investors, according to both Singhvi and Rangar.
“There is strong optimism about the future of the Saudi startup ecosystem among investors,” Singhvi said, highlighting the growing sophistication of the ecosystem.
The rise of corporate venture capital, with large corporations investing in startups for innovation, has been a major factor, offering funds, mentorship, and industry expertise.
The increasing alignment of valuations with market fundamentals is further contributing to this optimism.
“Investors are particularly encouraged by the growth potential in sectors like fintech, e-commerce, and digital transformation, which are expected to continue attracting significant capital,” Rangar added, noting that Saudi startups’ resilience amid regional challenges reinforces this positive outlook.
Saudi Arabia’s leading position
Comparatively, Saudi Arabia is surpassing other MENA markets such as the UAE and Egypt in terms of venture capital funding.
“It has more than 8,400 startups, of which two have already become unicorns – startups with a valuation exceeding $1 billion – namely stc pay and Tamara. While the UAE remains a strong competitor with a higher number of transactions, the gap in funding between the two has widened, with Saudi Arabia securing a larger share of the region’s total funding,” Rangar said.
“The Kingdom’s focus on high-growth sectors and the support from initiatives like the Saudi Unicorns program have positioned it as a rising star in the global startup ecosystem, setting it apart from its regional counterparts,” he added.
Crescent Enterprises, for its part, sees the Saudi market as a hub of significant opportunity. Singhvi explained that the firm is actively exploring investment opportunities across sectors and has already established a strong presence in the Kingdom.
Companies like Gulftainer Group, which manages terminals in Jubail, and Momentum Logistics, which operates a logistics hub in Dammam, are part of Crescent’s portfolio.
He also mentioned several portfolio companies that already have significant presence in Saudi Arabia, such as Kitopi, a cloud-based smart kitchen operator, and Transcorp, a temperature-controlled last-mile delivery service provider.
Looking ahead, Singhvi said: “We aim to deepen our presence in Saudi Arabia by investing in innovative startups and established businesses that align with our vision of sustainable growth and development.”
He mentioned that portfolio startups like BreakBread, a digital marketplace, and FreshToHome, a food tech company, are also planning to expand their operations into Saudi Arabia, signaling further growth potential.
Regulatory reforms helping drive growth in Saudi Arabia’s commercial real estate sector
Updated 8 min 47 sec ago
MOHAMMED AL-KINANI
JEDDAH: Saudi Arabia’s commercial real estate sector is witnessing robust growth, driven by rising demand across key industries, including offices, hospitality, and data centers.
The sector is also evolving with a focus on smart technologies, sustainability, and specialized assets, reflecting the Kingdom’s broader economic transformation goals.
Strategic government initiatives, such as Vision 2030, and increased foreign investment are playing a crucial role in this expansion, as highlighted by the latest Knight Frank report.
The Kingdom’s major cities are becoming regional hubs for commercial activity, attracting international businesses and supporting Saudi Arabia’s economic diversification efforts.
As the Kingdom continues to implement its Vision 2030 strategies, the commercial real estate sector is poised to play a pivotal role in shaping the future of the country’s urban landscape and economic growth.
The capital city, Riyadh, remains at the center of this surge, attracting numerous regional and international companies, while other cities such as Jeddah show early signs of growth.
According to Knight Frank’s biannual review of key trends and the performance of the market in the Kingdom for summer 2024, this growth is driven by rising demand and supported by strategic government reform initiatives.
The report by the London-based global real estate consultancy firm showed that the office market in Riyadh is particularly dynamic, benefiting from the regional headquarters program initiative, which has attracted European companies and spurred demand for office space.
In 2023, Saudi Arabia’s non-oil revenue reached 50 percent of gross domestic product for the first time, amounting to $453 billion, according to the Ministry of Economy and Planning.
The report added that this economic growth has significantly boosted demand for commercial real estate across all sectors, with Riyadh’s office market seeing the most benefit as office space demand rises.
The commercial real estate sector remains strong, with office yields holding at 7.75 percent, supported by shrinking availability and fast-increasing rents.
Investor interest in Saudi Arabia is also surging, with the government granting a record 2,884 investment licenses in the last quarter of 2023, marking a 125 percent year-on-year increase.
Knight Frank further noted that in the first quarter of 2024, the Kingdom recorded 104,000 new business registrations, up 59 percent from the same period the year before, bringing the total to over 1.45 million registrations.
Speaking to Arab News, Elias Abou Samra, CEO at RAFAL Real Estate Development Co. highlighted the current trends shaping the commercial real estate market in Saudi Arabia which has seen Riyadh become a magnet for commercial real estate at a regional level.
“The capital has attracted more than 500 regional and international companies since the launch of the headquarters program by Royal Commission of Riyadh City in 2021. We are expecting a new supply of approximately 5 million sq. meters of office space by 2030, and we believe this will barely match the pent-up demand,” he said.
Abou Samra added that as for other major cities the demand remains local and growth is organic, pending the roll out of certain initiatives and incentives such as special economic zones in King Abdullah Economic City and Eastern Province.
The executive pointed out that Riyadh has absorbed 90 percent of the demand in recent years and is expected to continue to do so for the next four years. He also added that the coast city of Jeddah is witnessing early signs of growth as major master plans and infrastructure projects reach advanced design stages.
“Other cities continue to serve their local and regional markets with a healthy 5 percent growth per year that is sustained, yet no paradigm shifts are sensible yet,” he said.
The sector will continue to benefit from ongoing digital transformation efforts, with technology playing a crucial role in shaping smarter, more efficient spaces.
Mamdouh Al-Doubayan, managing director at Globant for Middle East and North Africa, said that government support coupled with a growing focus on sustainability and the implementation of smart technologies will drive the market’s expansion.
“Key factors such as foreign investment, the evolution of regulatory frameworks, and demand for innovative, flexible workspaces will also play a critical role in the sector’s growth, he said, adding that his company is well-positioned to support this transformation.
Mamdouh Al-Doubayan, managing director at Globant for Middle East and North Africa. (Supplied)
Regarding the future success drivers for Saudi Arabia’s sector, Abou Samra highlighted that they go beyond basic supply and demand, emphasizing the market’s shift toward mixed-use and transit-oriented developments, reflecting greater sophistication.
“As such, part of demand springs from upgrades within existing stock of office space, and conversion of old stock to alternative asset classes. Another driver is the modernization and openness of the regulatory environment and quasi-governmental entities that are jointly paving the way for innovative products,” the CEO said.
Abou Samra added that the Mukaab at Riyadh’s New Murabba mega project is a testament to the new frontiers of commercial real estate in Saudi Arabia.
Addressing the impact of Saudi Vision 2030 on the strategic direction of commercial real estate development, Rafal’s CEO noted that the Kingdom’s decade-end plan touches all sectors of the economy, enhancing existing industries and introducing new ones like mining, tourism, and cloud computing.
“As a result, we are migrating from a one-size-fits all commercial real estate market to specialized assets,” he said.
Abou Samra identified data centers as the leading new addition to the commercial real estate market, followed by logistics and biomedical sectors. He emphasizes that these developments are driven by Saudi Arabia’s Vision 2030, which aims to diversify the economy by fostering new industries and reducing dependence on oil.
Shedding light on the areas or sectors within commercial real estate that are currently attracting the most investment, Abou Samra noted that, in addition to mainstream commercial office space, the industrial and logistics sectors have experienced double-digit growth since 2021.
He also highlighted that major regional players are entering these markets, and foreign direct investments in these sectors continue to flow into the Kingdom.
On the other hand, technology has become essential to the success of every industry, and commercial real estate is no exception.
Globant’s Al-Doubayan said technological advancements, including smart building technologies and digital platforms, are shaping the commercial real estate industry in Saudi Arabia, emphasizing their transformative impact on the sector in the Kingdom.
“Smart building technologies, integrated with IoT, AI, and data analytics, are enabling the creation of more intelligent, efficient, and adaptive spaces,” he said, adding that his company focuses on enhancing connected experiences within smart venues, allowing building owners and operators to offer seamless experiences for tenants and visitors, while optimizing resource management.
He further said that digital platforms are also revolutionizing property management, making it possible to monitor and automate operations in real time. “This evolution is key to supporting the Kingdom’s broader vision of smart cities and sustainable urban growth.”
The Saudi government is prioritizing the real estate sector, enacting over 18 pieces of legislation, as of May, to drive its growth and significantly boost its GDP.
These include real estate systems, executive regulations, and regulatory rules, reflecting the government’s commitment to this sector as part of Vision 2030.
The sector’s role and contribution to the Kingdom’s GDP reached 5.9 percent in the fourth quarter of 2023.
Reflecting on the impact of recent regulatory and policy changes on the commercial real estate market, the Al-Doubayan stated that Saudi Arabia’s regulatory shifts, including the implementation of more transparent property laws and foreign investment incentives, have significantly increased the market’s attractiveness.
“These reforms are creating an environment conducive to international investment and collaboration, which aligns with Vision 2030’s goals of diversifying the economy, as more policies are introduced to attract global businesses,” he said.
Moreover, he anticipated that the real estate sector will see continued growth, especially in digital transformation projects that enhance operational efficiency and sustainability.
Al-Doubayan added that sustainability is central to the future of commercial real estate in Saudi Arabia.
He emphasized that the country is making strides toward green building practices, which are increasingly becoming a priority for developers and tenants alike.
“Certifications such as Leadership in Energy and Environmental Design, or LEED, are gaining traction, encouraging buildings to reduce energy consumption and carbon emissions,” he said.
Saudi fashion market cutting its cloth to new measurements thanks to e-commerce boom
Updated 19 min 55 sec ago
MANAL AL-BARAKATI
RIYADH: Saudi Arabia is witnessing a rapid transformation in its fashion sector, bolstered by economic diversification and a youthful, digitally savvy population.
With projections pointing to a robust growth trajectory, the Kingdom's fashion market is set to emerge as a driver of the nation's non-oil economy under Vision 2030.
The fashion market in Saudi Arabia is expected to generate $4.37 billion in revenue in 2024, with a compound annual growth rate of 11.62 percent from 2024 to 2029, according to Statista.
This will lead to a market volume of $7.57 billion in the next five years, underscoring the rising demand for fashion products, fueled by a growing population, increased disposable income, and the government's strategic focus on fostering non-oil industries.
E-commerce and online presence
One of the most dynamic segments of the fashion industry in Saudi Arabia is e-commerce. The online fashion sector is forecast to hit $2.5 billion in 2024, making up 17.8 percent of the country’s total online retail market.
With a projected CAGR of 4.4 percent between 2024 and 2028, this sphere is expected to grow to nearly $3 billion by 2028. This growth aligns with global trends as more consumers turn to online platforms for their fashion needs.
EcommerceDB highlights that in August, Saudi Arabia’s monthly e-commerce revenue for fashion reached $201 million, demonstrating a consistent interest in online fashion purchases despite a slight 6.1 percent decrease from the previous month.
More notably, this market continues to expand, with the share of online retail in fashion expected to surge from 40.6 percent to 68.9 percent by 2028, reflecting the growing preference for digital shopping.
As the online market grows, local companies are already capitalizing on this trend.
Saudi e-commerce retailer Namshi.com generated $167.2 million in revenue in 2023, making it a significant player in the Kingdom’s online fashion landscape.
This growth in internet sales has allowed local and regional brands to flourish, offering customers a wide variety of apparel, accessories, and footwear at the click of a button.
A shifting retail landscape
Saudi Arabia’s domestic fashion market has long been dependent on imports, with international brands dominating the retail scene.
In 2022 the Kingdom imported $2.6 billion worth of fashion goods from China alone. However, recent years have seen a pivot towards local production and the rise of Saudi brands.
In the same year, the Kingdom’s fashion industry was valued at $24.6 billion, contributing 1.4 percent of the nation’s GDP and employing 230,000 people.
This highlights the industry’s potential, which the Saudi government is keen to harness to reduce its reliance on foreign imports and support local talent.
Vision 2030 has identified the fashion sector as a significant contributor to non-oil GDP, and the Saudi Fashion Commission is at the forefront of these efforts.
The commission has launched several initiatives aimed at developing a comprehensive fashion value chain, from design and production to retail.
A key part of this strategy is fostering local talent, supporting the growth of small and medium-sized enterprises, known as SMEs, and creating a robust ecosystem where local designers can thrive.
Fostering local talent and reducing import dependency
The Saudi government has recognized fashion as a vital sector for cultural and economic growth. In 2021, the Kingdom spent $7.3 billion on imported fashion goods, highlighting the potential for domestic growth.
The Fashion Commission, established as part of Vision 2030, aims to build a thriving local fashion ecosystem by reducing reliance on imports and promoting Saudi designers on the global stage.
As Marriam Mossalli, a prominent Saudi fashion editor and designer, told Arab News: “The world has its eye on Saudi Arabia – whether it’s through our participation in global sports, promoting the Kingdom as a new tourism destination, or a global player in the start-up economy.”
This increased attention provides a unique opportunity for Saudi fashion to gain international recognition.
For generations, Saudi women have been involved in the fashion industry, sourcing fabric and working with local tailors, Mosalli said.
Today, social media and e-commerce have opened the doors for Saudi designers to expand beyond local markets, allowing them to tap into global demand, she added.
This is especially important as global interest in Saudi culture grows, providing a platform for Saudi designers to showcase their unique aesthetic.
Designer Yousef Akbar, whose designs have been featured on the cover of Vogue Arabia, believes that fashion is now recognized as an essential part of the Saudi economy.
“The fashion industry is now recognized as serious business for the government,” Akbar said, adding that while there was little support for fashion in the past, the sector is now seen as a crucial cultural and economic pillar.
Opportunities in the broader economy
As Saudi Arabia’s fashion industry grows, so does its potential to contribute to other sectors of the economy. The rise of luxury tourism, particularly with the development of high-end resorts along the Red Sea and other key projects, presents opportunities for fashion to intersect with hospitality, entertainment, and retail.
“There are so many sectors that utilize fashion, whether it’s the staff uniforms of a new resort by the Red Sea Development Company, or costumes for a new play produced by the General Entertainment Authority. There are so many opportunities for young Saudi talent to get involved and have their homegrown aesthetic celebrated,” Mossalli said.
The push for local production and the development of Saudi brands aligns further with broader economic goals to reduce dependence on oil, increase private sector participation in the economy, and foster innovation.
The fashion industry is well-placed to contribute to these goals, especially as the government invests in infrastructure, education, and technology to support its growth .
A promising future
Saudi Arabia’s fashion market is poised for rapid expansion, driven by both government initiatives and a growing consumer base that is eager for new and innovative products.
The retail demand for fashion products in the Kingdom is expected to increase by 48 percent to $32 billion by 2025, with the luxury sector set to enjoy a 19 percent growth . These figures underscore the vast potential that exists within the Saudi fashion industry.
With a strong focus on local talent development, sustainability, and international expansion, Saudi Arabia is well on its way to building a fashion industry that not only supports its economic goals but also celebrates its rich cultural heritage.
Burak Cakmak, CEO of the Fashion Commission, outlined this in a release, saying: “Market expansion efforts, including marketing campaigns and participation in international fashion events, further enhance the visibility and competitiveness of Saudi fashion brands.
“All of these are core strategic pillars that effectively nurture a vibrant, dynamic, and globally competitive fashion industry in the Kingdom.”
He added: “We believe that the future of Saudi fashion lies in the hands of our talented designers and visionary entrepreneurs. As we continue to support and nurture these individuals, we are confident that the Kingdom’s fashion industry will continue to flourish.”
Finland’s under-secretary of state says ‘more can be done’ to boost economic cooperation
Finland’s exports to Kingdom are currently €350m annually
Updated 01 November 2024
Lama Alhamawi
RIYADH: Jarno Syrjala, Finland’s under-secretary of state for external economic relations, has highlighted that his country’s exports to the Kingdom stand at about €350 million annually, and added that more could be done to boost economic cooperation in information and communications technology, tourism and shared know-how.
Syrjala was speaking on the sidelines of the eighth edition of the Future Investment Initiative, and added that in terms of trade relations between Saudi Arabia and Finland “the current situation is very good for both countries.”
Syrjala told Arab News that there had been “steady growth, but at the same time we are still at very low levels.”
He added: “I want both countries to be more ambitious when we do trade.
“When we look at the trade statistics, that’s only part of the truth. When we talk about the whole economic partnership between Saudi and Finland we need to also do more when it comes to investments.”
The under-secretary shared that Finland’s exports to the Kingdom are worth about €350 million annually, and admitted: “It’s not that much.”
He added that “Saudi exports to Finland are even less.”
He said: “If we look only at the trade figures, there has been steady growth during the last few years and especially after the COVID-19 era.”
Outside of trading goods and services, he expressed the hope that tourism will also pick up in the future.
He underlined that there are economic exchanges that would help to benefit both countries, while stressing that in services such as ICT and cybersecurity, there was room for a lot more cooperation.
He said: “(The) ICT sector, cybersecurity solutions, and so, that’s services, basically, not so tangible products or goods changing place. But ICT is a good example where it’s not only about goods.”
Another area for possible cooperation highlighted by the under-secretary was the health sector.
He said: “We produce health technology, health-related technology. There are digital solutions for that area available as well.
“Education has been there also for a long time. And that’s not only cooperation between companies or different school institutions, but it’s very important for people to have people contacts as well.”
The under-secretary was in Riyadh for the FII and to hold high-level ministerial meetings. He also “wanted to see it with his own eyes and be there.”
He added: “This event brings together people from different areas. So, there are the decision-makers, politicians, investors, professionals, visionaries.
“It’s a fascinating combination, I think, and so I wanted to see it with my own eyes. We had some Finnish companies, of course, participating.”
Nokia was among the many notable Finnish companies taking part in FII and Syrjala expressed the hope that FII will raise awareness about what kind of opportunities exist for cooperation.
He said: “We want to show what kind of new companies we have in Finland, also the traditional ones.”
Syrjala explained that he had visited several ministries and it was important that they continued to communicate.
He said: “What I have been emphasizing is the importance of visits, for example from different ministries, different sectors, so that we can really show to the private sector that the support for their businesses is there.
“There is a wide spectrum of areas the sectors can work together on.”
He highlighted that Vision 2030 will add to the opportunities for the two nations to further cooperate on modern and high-tech solutions.
SYDNEY: New Zealand has reached a trade deal with the six-nation Gulf Cooperation Council, which includes Saudi Arabia and the UAE, that Wellington said would open up major opportunities for Kiwi exporters in the Middle East.
The trade pact would remove tariffs for 51 percent of New Zealand’s exports to the region from day one and deliver duty-free access for 99 percent of New Zealand’s exports over 10 years, New Zealand Trade Minister Todd McClay said in a statement late on Thursday.
“Successfully concluding a trade agreement with the GCC has been a long-standing ambition for successive governments for almost two decades,” McClay said in Doha.
The statement did not specify when the trade pact will become effective.
The agreement with the Gulf states comes after New Zealand reached a trade deal with the UAE in September.
Trade between New Zealand and the GCC is worth more than NZ$3 billion ($1.79 billion) annually. The Pacific island nation exported NZ$2.6 billion to the Middle Eastern member countries in the year to June 2024, which included NZ$1.8 billion of dairy, official data showed.
