Saudi Arabia climbs 15 places to 12th in global tourist spending: UN Tourism

The ranking follows a September report from the UN Tourism, which highlighted the Kingdom’s leadership among G20 nations with a 73 percent increase in international visitor growth and a staggering 207 percent rise in international tourism receipts from January to July 2024 compared to the same period in 2019. File

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Updated 03 November 2024

MOHAMMED AL-KINANI

November 03, 2024 14:04

Saudi Arabia climbs 15 places to 12th in global tourist spending: UN Tourism

UNWTO praised Kingdom’s tourism progress as ‘significant milestone’ in its quest to become a global leader in the industry
In the first seven months of 2024, Saudi Arabia welcomed approximately 17.5 million international tourists

Updated 03 November 2024

MOHAMMED AL-KINANI

November 03, 2024 14:04

JEDDAH: Saudi Arabia has made a remarkable leap, climbing 15 places to rank 12th in global tourist spending for 2023, according to the latest UN Tourism report. This is the largest jump among the top 50 countries.

These achievements reinforce Saudi Arabia’s status as a premier global tourism destination, showcasing travelers’ growing confidence in the Kingdom's diverse and appealing offerings. In a bid to capitalize on this momentum, the tourism sector has raised its target for 2030 from 100 million to 150 million visitors, with potential for further increases if this goal is met ahead of schedule, according to Mahmoud Abdulhadi, deputy minister of destination enablement at the Ministry of Tourism.

Speaking at the Future Hospitality Summit in Riyadh last week, Abdulhadi noted that targets are continually assessed and adjusted based on sector performance.

The UNWTO praised the Kingdom’s tourism progress as a “significant milestone” in its quest to become a global leader in the industry. The report indicated that tourism-related spending surpassed $37 billion in 2023, accompanied by substantial growth in hotel capacity across the country.

In the first seven months of 2024, Saudi Arabia welcomed approximately 17.5 million international tourists. For 2023, the Kingdom hosted 27.4 million visitors, marking a 56 percent increase from 2019. This surge has placed Saudi Arabia at the top of the UN’s list for tourism growth among major destinations.

Additionally, the Kingdom’s tourism surplus reached a record SR48 billion ($12.8 billion) in 2023, a 38 percent year-on-year increase.

The International Monetary Fund, in its 2024 Article IV Consultation report released in September, commended the significant progress made by Saudi Arabia’s tourism sector under the Saudi Vision 2030 initiative. The IMF underscored the sector’s vital role in diversifying the Kingdom’s economic base, particularly within the services sector, where it has become a key growth driver in terms of visitor numbers, spending, job creation, and contribution to GDP.

According to the latest UNWTO Barometer report, global international tourist arrivals have rebounded to 96 percent of pre-pandemic levels from January to July 2024, totaling approximately 790 million — an 11 percent increase compared to the same period in 2023. The UNWTO also noted that the Middle East led global growth with a 26 percent rise in international arrivals compared to 2019 levels.

Fitch revises Oman’s outlook to positive, downgrades Egypt’s economic outlook

Updated 32 sec ago

Nirmal Narayanan

December 19, 2024 12:48

Fitch revises Oman’s outlook to positive, downgrades Egypt’s economic outlook

Updated 32 sec ago

Nirmal Narayanan

December 19, 2024 12:48

RIYADH: Fitch Ratings has revised Oman’s long-term foreign currency issuer default ratings to positive from stable and affirmed the IDR at BB+, driven by the availability of fiscal tools to combat future shocks.

According to its latest report, the US-based credit rating agency said that the Gulf country’s ratings were supported by higher gross domestic product per capita, the positive impact of recent budget reforms and decreasing government debt per GDP.

While Fitch maintains a positive outlook on Oman, its IDR remains lower than that of its regional neighbors, including Saudi Arabia and the UAE. In February, Fitch affirmed the Kingdom’s IDR at A+ with a stable outlook, while the UAE received an AA- rating.

According to the rating agency, a BB rating indicates an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time. However, it also suggests that the company or entity has some financial flexibility to meet its obligations despite the increased risk.

“High dependence on oil revenue, modest financial buffers given high exposure to volatile hydrocarbon prices, and Oman’s net external debtor position weigh on the ratings,” said Fitch.

Saudi Arabia’s A+ rating indicates the Kingdom’s strong capacity to pay financial commitments and signifies low default risk.

The analysis added that Oman’s positive outlook also reflects greater confidence in the resilience of public finances and the availability of more fiscal tools to respond to shocks than in the past.

The US-based agency said the Gulf country’s overall GDP is expected to expand by 1.8 percent in 2024, driven by the growth of the non-oil economy.

“We project overall GDP growth of 1.8 percent in 2024, after 1.2 percent in 2023, supported by non-oil growth of 3.7 percent, while hydrocarbon GDP was hindered by OPEC+ quotas. Domestic consumption, robust foreign investment and tourism will maintain non-oil growth above 3 percent in 2025 and 2026,” added Fitch.

The analysis added that Oman’s budget surplus is expected to narrow to 0.7 percent of GDP in 2025 and to turn into a minor deficit of 0.2 percent in 2026, assuming that the average price of Brent oil will reach $70 per barrel next year, and $65 per barrel in 2026.

In November, Moody’s also upgraded Saudi Arabia’s long-term local and foreign currency issuer and senior unsecured ratings to Aa3 from A1.

Moody’s gives Aa3 ratings to countries with very low credit risk and the best ability to repay short-term debt.

Fitch downgrades Egypt’s economic growth prospects

In a separate report, Fitch Ratings downgraded Egypt’s economic growth outlook to 3.7 percent for the fiscal year 2024/2025, down from a previous projection of 4.2 percent, driven by disruptions in the Suez Canal.

The US-based agency added that Egypt’s economy is expected to accelerate to 5.1 percent in 2025/26, up from its previous forecast of 4.7 percent.

Fitch said that this expected economic growth is driven by the possible normalization of Red Sea navigation and a stronger performance of the services sector due to easing geopolitical risks.

In November, speaking at the Rome MED-Mediterranean Dialogues conference, Egypt’s Minister of Foreign Affairs Badr Abdelatty said that the country had incurred losses amounting to $8 billion due to a significant drop in the Suez Canal revenues.

The analysis added that the country’s economy is recovering; however, the pace is slower than previously projected.

In October, the International Monetary Fund said that Egypt’s economy is set to expand by 2.7 percent in the current fiscal year before accelerating to 4.1 percent next year.

Earlier this month, another report by Fitch Ratings said that general business and operating conditions for financial institutions in Egypt are expected to improve next year.

In that report, Fitch said that improved investor confidence and healthy foreign currency liquidity conditions are some of the major factors that could strengthen the banking sector in Egypt in 2025.

Topics: Fitch Ratings Oman Egypt oman economy Egypt economy

FIFA World Cup 2034 to bring positive momentum to Saudi Arabia’s stock market

Updated 45 min 29 sec ago

Nirmal Narayanan

December 19, 2024 12:08

FIFA World Cup 2034 to bring positive momentum to Saudi Arabia’s stock market

Updated 45 min 29 sec ago

Nirmal Narayanan

December 19, 2024 12:08

RIYADH: As Saudi Arabia prepares to host the FIFA World Cup in 2034, stock market performance is expected to improve, according to a report.

In its latest analysis, SNB Capital said hosting the major event would also increase the Kingdom’s non-oil gross domestic product by 4 percent to 5 percent in the medium term, estimated between four to eight years.

The firm made this prediction after comparing the growth of the equity markets in South Africa, Russia, and Qatar when they hosted the mega football gala in 2010, 2018, and 2022, respectively.

According to the analysis, hosting the FIFA World Cup in 2034 is expected to significantly impact the Saudi economy, further accelerating the growth driven by Vision 2030 — a national program aimed at diversifying the Kingdom’s economy beyond oil dependence.

“The decision for the host is usually made roughly seven to 12 years in advance. Post announcement, equity markets generally performed well with South Africa showing the strongest return, followed by Qatar and Russia. Therefore, we expect the Saudi market to outperform emerging markets in the coming period,” said SNB Capital.

It added: “FIFA 2034 also reflects positively on the equity market, leading to positive market return, valuation expansion as well as resilience and quick recovery from any potential global market headwinds.”

In the short term, between one to four years, Saudi Arabia will have extensive infrastructure spending, including stadiums, transportation networks, and urban development.

In this period, the infrastructure and construction sectors will be the primary beneficiaries, which include steel, cables, and cement companies in the Kingdom.

In the medium term, between four to eight years, these projects will be near completion, and construction companies will benefit during this period.

In the long term, between eight to 12 years, the tourism and hospitality sectors will receive gains, while the retail industry, including discretionary retailers and car rental companies, is also poised to receive benefits.

In November, experts told Arab News that Saudi Arabia could expect a GDP boost of between $9 billion and $14 billion from the event, as well as the creation of 1.5 million new jobs and the construction of 230,000 hotel rooms developed across five host cities.

SNB Capital estimates that the total cost of hosting the World Cup in Saudi Arabia will be around $26 billion. This cost is considered relatively low, as much of the required infrastructure investment is already part of the Kingdom’s Vision 2030 plans. Additionally, hosting the World Cup follows Expo 2030, another major global event.

In the previous editions of the tournament, Qatar spent a staggering $243 billion, while expenses to host the event in South Africa came in at $7.2 billion.

Brazil’s 2014 hosting involved a spend of $19.7 billion, while Russia invested $16 billion in 2018.

Earlier this month, the bid evaluation report released by FIFA showed that Saudi Arabia is set to deliver a World Cup in 2034 that saves $450 million on costs.

The bid evaluation report added that revenue from ticket and hospitality will surpass FIFA’s baseline projections by 32 percent, or $240 million.

FIFA added that online and licensing revenue streams are forecast to outperform by $7 million, compared to baseline figures.

SNB Capital also echoed similar views and said that the World Cup is expected to improve the outlook of broadcasting and event management companies.

The analysis revealed that FIFA 2034 will boost Saudi Arabia’s tourism sector, leading to higher revenues from the industry.

The event is also expected to create permanent and temporary jobs across various sectors in the Kingdom, reducing unemployment and boosting disposable income.

“A successful hosting of the World Cup will also leave a legacy of high-quality infrastructure which will help Saudi to cater to the potential pickup in tourism demand beyond 2034,” added SNB Capital.

Topics: FIFA World Cup 2034 Saudi World Cup 2034 bid Saudi Stock Exchange (Tadawul)

Oil Updates — crude retreats on demand concerns after Fed signals slower easing ahead

Updated 19 December 2024

Reuters

December 19, 2024 10:04

Oil Updates — crude retreats on demand concerns after Fed signals slower easing ahead

Updated 19 December 2024

Reuters

December 19, 2024 10:04

LONDON: Oil prices fell in Asian trade on Thursday after the US Federal Reserve signaled it would slow the pace of interest rate cuts in 2025, which could slow economic growth and reduce fuel demand.

Brent futures fell 47 cents, or 0.6 percent, to $72.92 a barrel by 8:15 a.m. Saudi Time. US West Texas Intermediate crude fell 39 cents, or 0.6 percent, to $70.19.

The declines reversed most of the benchmark contracts’ gains from Wednesday when prices settled higher as US crude stocks fell and the US Federal Reserve cut interest rates by 25 basis points as expected.

Prices weakened after US central bankers issued projections calling for two quarter-point interest rate cuts in 2025 on concerns about rising inflation. That was half a point less than they had anticipated as of September.

Lower rates decrease borrowing costs, which can boost economic growth and demand for oil.

“The demand-supply balance going into 2025 continues to look unfavorable and predictions of more than 1.0 million bpd demand growth in 2025 look stretched in our opinion. Even if OPEC+ continues to withhold production, the market may still be in surplus,” DBS Bank’s energy sector team lead Suvro Sarkar said.

Meanwhile, although demand in the first half of December rose year-on-year, volumes remained lower than expected by some analysts.

JP Morgan analysts said in a note that global oil demand growth for December so far was 700,000 barrels per day less than it had expected, and for the year-to-date, global demand had risen by 200,000 bpd less than it had forecast in November 2023.

Official data from the Energy Information Administration on Wednesday showed US crude stocks fell by 934,000 barrels in the week to Dec. 13, compared with analysts’ expectations in a Reuters poll for a 1.6 million-barrel draw.

While the drawdown was less than expected, the market found support in the data as US crude exports rose by 1.8 million bpd last week to 4.89 million bpd.

Topics: Oil US Federal Reserve energy oil prices oil updates Brent crude

SAMA cuts benchmark interest rate to 5% in line with US Federal Reserve move

Updated 42 min 12 sec ago

MIGUEL HADCHITY

December 19, 2024 09:23

SAMA cuts benchmark interest rate to 5% in line with US Federal Reserve move

Updated 42 min 12 sec ago

MIGUEL HADCHITY

December 19, 2024 09:23

RIYADH: Saudi Arabia’s central bank lowered its benchmark interest rate to 5 percent, its third cut this year, aligning with the US Federal Reserve’s decision to reduce rates by 25 basis points.

The institution also known as SAMA, cut its repurchase agreement rate to 5 percent and the reverse repurchase agreement rate to 4.5 percent, it said in a statement. The move is aimed at maintaining monetary stability amid shifting global economic conditions.

The move aligns with the US Federal Reserve decision, which similarly cut rates by 25 basis points, bringing its target range to between 4.25 percent and 4.5 percent.

“This decision is in line with SAMA’s mandate of preserving monetary stability in the context of global developments,” SAMA said.

The reduction follows a more aggressive 50-basis-point cut in September and reflects a recalibration of policy as inflationary pressures ease. The move is expected to lower borrowing costs, providing relief after two years of elevated rates designed to curb inflation.

Central banks across the Gulf Cooperation Council, whose currencies are largely pegged to the dollar, mirrored the Fed’s move despite relatively stable inflation levels in the region.

The UAE cut its overnight deposit facility rate by 25 basis points to 4.4 percent, while Oman trimmed its repo rate by the same margin to 5 percent. Qatar opted for a slightly deeper reduction, lowering its three main rates by 30 basis points. Bahrain reduced its overnight deposit rate by 25 basis points to 5 percent.

In a separate statement, the Central Bank of Kuwait announced on Wednesday that it had adopted a “gradual and balanced approach” to monetary policy, reducing its discount rate by 25 basis points to 4 percent, effective Sept. 19.

Over the past two years, the US Federal Reserve has aggressively raised interest rates to combat inflation, significantly tightening monetary policy to stabilize prices.

Although inflation in the US has edged closer to the Fed’s 2 percent target, it remains slightly elevated, leaving consumers burdened by high costs.

The GCC economies, particularly Saudi Arabia, stand to benefit from the recent rate cuts. Lower borrowing costs are expected to bolster the Kingdom’s non-oil sectors, a key pillar of Vision 2030. Industries such as construction, real estate, and services, which have already experienced robust growth, are likely to gain additional momentum.

Moreover, cheaper credit could accelerate investments in infrastructure and technology — two critical components of Saudi Arabia’s economic diversification strategy.

Topics: US Fed Inflation saudi central bank

Saudi Arabia’s ACWA Power launches $3bn renewable projects in Uzbekistan

Updated 18 December 2024

MOHAMMED AL-KINANI

December 18, 2024 17:34

Saudi Arabia’s ACWA Power launches $3bn renewable projects in Uzbekistan

ACWA Power has been significantly involved in Uzbekistan’s renewable energy sector in recent years
Uzbekistan aims to generate 40 percent of its electricity from renewable sources by 2030

Updated 18 December 2024

MOHAMMED AL-KINANI

December 18, 2024 17:34

JEDDAH: Saudi utility giant ACWA Power launched three renewable projects in Uzbekistan, including wind, solar, and battery storage, marking a $3 billion investment in the country’s energy transition.

On Dec. 18, Uzbekistan’s President Shavkat Mirziyoyev and the Kingdom’s Minister of Energy, Prince Abdulaziz bin Salman, who joined virtually, inaugurated the projects.

The initiatives include the Bash and Dzhankeldy Wind Power Plants with a total capacity of 1,000 megawatts and a transmission line, the Samarkand 1 and 2 solar projects with 1,000 MW of solar power and a 1,000 MWh battery energy storage system, and the Tashkent BESS Project, which consists of a 500 MWh BESS.

Uzbekistan aims to generate 40 percent of its electricity from renewable sources by 2030, a critical milestone in its broader plan to achieve 20 gigawatts of clean energy capacity by the decade’s end.

Mohammad Abunayyan, the chairman of ACWA Power’s board of directors, who also chairs the Saudi-Uzbek Business Council, emphasized the significant progress in his company’s collaboration with the Uzbek government, highlighting its role as a key strategic investor in the country’s rapidly growing clean energy sector.

Abunayyan said: “Today’s groundbreaking highlights the multitude of large-scale foreign direct investments and commendable efforts by Uzbekistan to strengthen the potential of the country’s energy system and capacity. It also paves the way for the commencement of ACWA Power projects that are expected to yield widespread benefits for Uzbekistan’s key regions and communities.”

Prince Abdulaziz commended the robust relationship between the Kingdom and Uzbekistan and said the alliance has nurtured deep collaboration across multiple sectors, with a particular focus on energy, which has brought mutual benefits to both nations, according to a statement from the company.

The Saudi minister also praised the economic cooperation between the two countries, particularly in the context of Saudi Vision 2030 and Uzbekistan Strategy 2030. He stressed their shared goals of economic development, diversification, renewable energy, and sustainable growth, as well as the Kingdom’s growing investment in Uzbekistan’s electricity sector amid the country’s energy transition.

In October, ACWA Power announced it signed a letter of intent with the Asian Infrastructure Investment Bank to secure $150 million for the development of three wind power plants in Uzbekistan, namely the Kungrad 1, 2, and 3 plants in the Karakalpakstan region.

The company, listed on the Saudi Stock Exchange, said in a press release that the financing will support the three facilities, each with a capacity of 500 MW.

The financing term is set at four years and will be backed by an institutional guarantee from ACWA Power.

Uzbekistan is a key foreign market for ACWA Power, which has been significantly involved in the country’s renewable energy sector in recent years.

The company’s current portfolio in Uzbekistan includes 11.6 GW of power, with 10.1 GW from renewable sources, along with the country’s first green hydrogen project, which has an annual capacity of 3,000 tonnes.

Since the partnership began, four major projects worth approximately $3 billion have been successfully implemented, with an ongoing portfolio of initiatives valued at $15 billion, ACWA Power said in the statement.

Topics: Saudi Arabia ACWA Power Uzbekistan renewable projects

Saudi Arabia climbs 15 places to 12th in global tourist spending: UN Tourism

Saudi Arabia climbs 15 places to 12th in global tourist spending: UN Tourism

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Fitch revises Oman’s outlook to positive, downgrades Egypt’s economic outlook

Fitch revises Oman’s outlook to positive, downgrades Egypt’s economic outlook

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Oil Updates — crude retreats on demand concerns after Fed signals slower easing ahead

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SAMA cuts benchmark interest rate to 5% in line with US Federal Reserve move

SAMA cuts benchmark interest rate to 5% in line with US Federal Reserve move

Central Bank of Egypt sells $1bn in 3-month treasury bills as yields hit record highs

Saudi Arabia’s money supply reaches $783bn: SAMA

Saudi Arabia’s ACWA Power launches $3bn renewable projects in Uzbekistan

Saudi Arabia’s ACWA Power launches $3bn renewable projects in Uzbekistan

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Saudi Arabia climbs 15 places to 12th in global tourist spending: UN Tourism

Saudi Arabia climbs 15 places to 12th in global tourist spending: UN Tourism

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