Pakistan finmin, Saudi National Bank chairman discuss financial cooperation, banking sector partnerships
Pakistan finmin, Saudi National Bank chairman discuss financial cooperation, banking sector partnerships/node/2587327/business-economy
Pakistan finmin, Saudi National Bank chairman discuss financial cooperation, banking sector partnerships
Pakistan’s Finance Minister Muhammad Aurangzeb (second from right) meets met Saudi National Bank Chairman Saeed bin Mohammed Al-Ghamdi (second from left) in Davos, Switzerland on January 21, 2025. (Finance Ministry)
ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb met Saudi National Bank Chairman Saeed bin Mohammed Al-Ghamdi on Tuesday to discuss financial cooperation and strengthening banking sector partnerships between the two countries, Pakistan’s finance ministry said.
The meeting between the two officials took place during the sidelines of the World Economic Forum (WEF) summit in Davos, which will be held till Jan. 24 under the theme: ‘Collaboration for the Intelligent Age’.
Pakistan and Saudi Arabia are close regional partners and economic allies, with both countries signing 34 agreements worth $2.8 billion in October 2024.
“The two leaders discussed potential financial cooperation between Pakistan and Saudi Arabia, particularly focusing on strengthening partnerships in the banking sector,” the finance ministry said in a statement.
Aurangzeb briefed Ghamdi about Pakistan’s economic progress and the improvements made by the South Asian nation in its international financial rankings.
“Both sides expressed their commitment to further deepen economic ties for mutual benefit,” the ministry said.
Meanwhile, the Saudi Export-Import Bank and Pakistan’s Bank Alfalah also signed a $15 million financing agreement, strengthening access to Pakistani markets and boosting trade and economic ties.
Separately, Aurangzeb also met Egyptian Minister of Planning, Dr. Rania Al-Mashat at the sidelines of the summit. The two ministers discussed ongoing programs and projects between Pakistan and Egypt, the finance ministry said.
“The two ministers agreed to continue discussions on economy and finance and learn from each other’s experiences,” the statement said.
RIYADH: A rise in the prices of several categories led Oman’s inflation rate to increase by 0.7 percent in December year on year for the base year 2018, according to new data.
Released by the National Center for Statistics and Information, the data shows a rise in prices across various personal goods and services groups, including a 4.5 percent increase in personal goods and services, a 3.2 percent rise in health, and a 1.7 percent increase in food and non-alcoholic beverages.
The restaurants and hotels group also saw a surge of 0.8 percent, the culture and entertainment group rose by 0.6 percent, and the clothing and footwear group grew by 0.5 percent.
Additionally, the furniture, household equipment, and maintenance group increased by 0.4 percent, while the education group saw a slight rise of 0.1 percent.
This data aligns with broader resilience observed across the Gulf Cooperation Council region. An International Monetary Fund report released in December highlighted how GCC economies have successfully weathered recent shocks, supported by strong non-hydrocarbon growth and ongoing reforms.
Oman’s economic resilience has been recognized internationally, with its sovereign credit rating recently upgraded to investment grade.
This economic strength is further reflected in Oman’s 6.2 percent budget surplus and 2.4 percent current account gain in 2024, driven by prudent fiscal policies, high oil prices, and growing non-hydrocarbon exports.
The consumer price index data also revealed specific increases in food prices. For example, the vegetable group rose by 7.6 percent, the milk, cheese, and eggs group increased by 3.8 percent, and other food products not classified under another category saw a 3.7 percent rise.
Other food categories such as sugar, jam, honey, and sweets rose by 2.8 percent, the meat group increased by 2.6 percent, the fruits group rose by 2.2 percent, and oils and fats saw a 1.6 percent increase.
In contrast, the prices of the transportation group decreased by 0.8 percent, the non-alcoholic beverages group dropped by 0.5 percent, and the fish and seafood group saw a significant decrease of 6.3 percent.
Meanwhile, the prices of the housing, water, electricity, gas, and other fuels, communications, and tobacco groups remained stable. The data also revealed that the prices of the bread and grains group stayed unchanged.
Looking ahead, the nation predicts a modest 2.7 percent growth in gross domestic product (GDP) this year, while IMF projections released earlier this month forecast a slightly higher expansion of 3.1 percent.
Inflation has continued to ease in Oman, declining to 0.6 percent during the first 10 months of 2024, compared to 1.0 percent in 2023.
GCC records $1.5tn in trade volume, ranking sixth globally
Updated 31 min 53 sec ago
MOHAMMED AL-KINANI
JEDDAH: The Gulf Cooperation Council achieved a trade volume of $1.5 trillion in 2023, securing its position as the sixth-largest global trader, according to the latest data.
This figure represents 3.4 percent of global trade, highlighting the region’s growing economic importance. However, the GCC saw a 4 percent decline in trade volume compared to 2022, as reported in the 2023 GCC Foreign Trade Report issued by the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf.
The report also revealed that the GCC ranked third globally in the merchandise trade balance, with a surplus of $163.7 billion in 2023. This marks a sharp drop of 57.1 percent from the previous year’s surplus of $381.3 billion.
Despite these challenges, the region’s non-oil sectors have continued to grow, reflecting the GCC’s commitment to economic diversification. Additionally, the International Monetary Fund highlighted that foreign reserves held by GCC central banks are equivalent to approximately 10 months of the region’s import needs.
The IMF further noted that the GCC has established itself as a crucial hub for regional economic growth, aided by its open trade policies, liberal capital flows, and a welcoming approach to foreign labor.
The GCC’s position in global trade was also reinforced by its ranking as the fifth-largest exporter of commodities, contributing 3.1 percent of the world’s total. In 2023, the region’s commodity exports were valued at $0.8 trillion, though this marked a 14.5 percent decline compared to 2022.
On the flip side, merchandise imports into the GCC increased by 13.4 percent to reach $0.7 trillion, accounting for 2.7 percent of global imports.
When excluding intra-GCC trade, total goods trade fell by 4 percent, reaching $1.48 trillion in 2023. The decline was primarily driven by a 14.5 percent drop in commodity exports, which decreased from $962.6 billion in 2022 to $823.1 billion in 2023. Conversely, commodity imports rose by $78 billion, reaching $659.3 billion in 2023.
A significant decline in oil exports was also recorded. The GCC saw a 20.5 percent drop in oil exports, which totaled $525.5 billion in 2023, compared to $661.1 billion the previous year.
China was the GCC’s largest trading partner in 2023, with total commodity trade valued at $297.9 billion, far outpacing India, which ranked second at $150.4 billion.
The Asian country also remained the GCC’s top destination for commodity exports, accounting for 19.2 percent of the total at $158.3 billion, although this represented a 16.8 percent drop from 2022.
Moreover, China topped the list of countries supplying merchandise imports to the GCC, contributing 21.2 percent of the total imports, valued at $139.6 billion, up 10.8 percent from $126.0 billion in 2022.
Saudi Arabia raises local workforce quotas across key sectors
Updated 38 min 54 sec ago
Nour El-Shaeri
RIYADH: Saudi professionals in dentistry, pharmacy, accounting, and technical engineering will soon see expanded job opportunities as the Kingdom rolls out new Saudization targets under its Vision 2030 plan.
The HRSD, in collaboration with health, commerce, and housing authorities, is now focused on localizing 269 professions.
The initiative builds on earlier measures, such as increasing Saudization rates in radiology to 65 percent, medical laboratories to 70 percent, and physiotherapy and therapeutic nutrition to 80 percent last October.
Effective July 27, community pharmacies and medical complexes will be required to achieve a 35 percent Saudization rate, hospitals 65 percent, and other pharmacy-related businesses 55 percent, according to a Ministry of Human Resources and Social Development announcement. These rules will apply to companies employing five or more pharmacy professionals.
Saudization, launched in 2011, aims to increase Saudi employment in the private sector by setting industry-specific quotas for Saudi workers. This initiative has contributed to a significant drop in Saudi unemployment, which fell from 12.8 percent in 2018 to 7.1 percent by mid-2024, surpassing the original Vision 2030 goal of 8 percent. As a result, the Kingdom has updated its national target to a 5 percent unemployment rate by 2030.
In dentistry, the phased Saudization plan aims for a 45 percent rate by mid-2025, increasing to 55 percent in 2026. This will apply to dental practices with three or more professionals, with a minimum salary of SR9,000 ($2,399) to qualify.
For accounting, the HRSD, in partnership with the Ministry of Commerce, will gradually raise Saudization rates over the next five years, beginning on Oct. 27.
Initially, businesses with five or more accountants will need to meet a 40 percent localization target, with the goal of reaching 70 percent by the final phase.
Technical engineering will see a 30 percent Saudization requirement starting July 27, affecting companies with five or more technical engineers.
The ministry has provided detailed guidelines on its website to assist businesses in understanding the new rules, including implementation procedures and penalties for non-compliance.
UAE, India, and China among top destinations for KSA’s non-oil goods
Strengthening the sector is one of the crucial goals outlined in Vision 2030 initiative
Updated 25 January 2025
Nirmal Narayanan
RIYADH: The UAE was the leading destination for Saudi Arabia’s non-oil exports in November, with outbound shipments to the Emirates reaching SR7.17 billion ($1.87 billion) in what was a 22.35 percent month-on-month rise.
According to the General Authority for Statistics, the Kingdom exported machinery and mechanical appliances valued at SR3.15 billion to the UAE in November, followed by transport parts and precious metals at SR2.03 billion and SR404.7 million, respectively.
In October, Saudi Arabia’s non-oil shipments to the UAE amounted to SR5.86 billion, while it was SR6.54 billion and SR6.78 billion in September and August, respectively.
Saudi Arabia also exported plastic and rubber products worth SR330 million in November, while outbound shipments of chemical products totaled SR319 million.
Strengthening the non-oil sector is one of the crucial goals outlined in Saudi Arabia’s Vision 2030 agenda, as the Kingdom is steadily diversifying its economy by reducing its dependence on crude revenues.
Affirming the growth of Saudi Arabia’s non-oil private sector, the Kingdom’s Purchasing Managers’ Index reached 58.4 in December, marking a slight decline from a 17-month high of 59 in the previous month, according to the Riyad Bank Saudi Arabia PMI survey compiled by S&P Global.
Any PMI readings above 50 indicate growth of the non-oil private sector, while readings below the number signal contraction.
Underscoring the progress of Saudi Arabia’s non-energy sector, the Kingdom’s PMI has remained above the 50 growth mark continuously since September 2020.
China held the third spot for Saudi Arabia’s non-oil exports. (SPA)
Saudi Arabia’s PMI in December is also the highest among its Middle East neighbors.
The Kingdom’s Arab neighbors UAE posted a PMI of 55.4 in December, with Kuwait registering 54.1, and Qatar on 52.9.
Speaking at the World Economic Forum in Davos earlier this month, Saudi Arabia’s Finance Minister Mohammed Al-Jadaan said that the Kingdom’s commitment to economic diversification under Vision 2030 was driving steady growth, with the growth of non-oil gross domestic product being prioritized over traditional oil revenues. India was another major destination for Saudi Arabia’s non-energy goods in November, with exports amounting to SR2.52 billion, representing a 19.43 percent increase compared to the previous month. GASTAT revealed that Saudi Arabia exported chemical products worth SR1.34 billion, while outbound shipments of plastic and rubber products were valued at SR449.6 million, and base metals amounted to SR324.5 million.
The Kingdom also exported precious stones and metals amounting to SR324.5 million in November to India.
China held the third spot for Saudi Arabia’s non-oil exports, with the Asian giant receiving inbound shipments from the Kingdom valued at SR2.17 billion in November, marking a month-on-month decline of 7.65 percent. Other top destinations for Saudi Arabia’s non-hydrocarbon goods were Singapore, with a value of SR1.23 billion; Turkiye at SR960.4 million, and Bahrain at SR929.7 million.
Egypt received non-energy products amounting to SR868.4 million in November, while exports to the US and Jordan totaled SR772.8 million and SR642.6 million, respectively.
Overall, Saudi Arabia’s non-oil exports witnessed an annual rise of 19.7 percent in November, reaching SR26.92 billion.
Speaking at the World Investment Conference in November, Saudi Arabia’s Minister of Economy and Planning Faisal Al-Ibrahim said that non-oil activities account for 52 percent of the Kingdom’s gross domestic product.
Saudi Minister of Economy and Planning Faisal Al-Ibrahim said non-oil activities account for 52% of KSA’s GDP. (AFP)
The minister added that the Kingdom’s non-oil economy has been growing at 20 percent since the launch of the Vision 2030. In November, Saudi Arabia exported non-energy goods worth SR16.76 billion via sea, while outbound shipments via land and air totaled SR4.99 billion and SR5.17 billion, respectively.
King Fahad Industrial Sea Port in Jubail was the main exit point for Saudi Arabia’s non-hydrocarbon products with goods valued at SR3.39 billion.
Jeddah Islamic Sea Port and Jubail Sea Port also handled outbound shipments worth SR3.35 billion and SR1.91 billion, respectively.
In terms of exit points via land, Al Bat’ha Port handled goods valued at SR1.85 billion, while products worth SR696.4 million passed through Al Hadithah Port.
Among airports, King Khalid International Airport in Riyadh handled outbound shipments worth SR2.79 billion, while King Abdulaziz International airport processed non-energy goods amounting to SR1.99 billion.
In December, a report released by Mastercard Economics also underscored the robust expansion of Saudi Arabia’s non-oil activities.
The analysis said that the Kingdom’s GDP is expected to witness an expansion of 3.7 percent year on year in 2025, driven by a rise in the Kingdom’s non-oil activities.
The Mastercard report added that economic diversification efforts in the Kingdom will continue in 2025 as the government leverages strong balance sheets to finance investment in infrastructure.
Overall merchandise exports
GASTAT revealed that Saudi Arabia’s overall merchandise exports witnessed a decline of 4.69 percent in November 2024 compared to the same month in 2023, reaching SR90.54 billion.
The authority said this fall in overall exports was due to a 12.3 percent decrease in oil exports.
“Consequently, the percentage of oil exports out of total exports decreased from 76.3 percent in November 2023 to 70.3 percent in November 2024,” said GASTAT.
In November, Saudi Arabia’s overall merchandise exports to China stood at SR13.53 billion, followed by Japan at SR8.93 billion, the UAE at 8.75 billion and India at SR8.74 billion.
The flow of Saudi exports to China signifies strong bilateral relations between both nations, with the Kingdom being the largest trading partner of China in the Middle East since 2001.
The Kingdom and Saudi Arabia are also strategic partners in various other sectors like energy and finance, as well as the Belt and Road Initiative.
South Korea received goods worth SR8.34 billion in November, while the Kingdom’s exports to the US stood at SR3.72 billion, to Singapore at SR3.34 billion, and SR2.85 billion going to Malaysia.
Imports in November
According to GASTAT, Saudi Arabia’s overall imports in November were valued at SR73.65 billion, marking a rise of 13.9 percent compared to the same month in the previous year.
Saudi Arabia imported goods worth SR20.11 billion from China, led by mechanical appliances and electrical equipment valued at SR9.99 billion.
The Kingdom also imported transport equipment and base metal products amounted to SR2.56 billion and SR1.89 billion, respectively.
China was closely followed by the US and UAE with the Kingdom welcoming goods from these nations valued at SR7.52 billion and SR3.90 billion, respectively in November.
The Kingdom also imported goods worth SR3.22 billion from Germany and SR3.14 billion from India.
Japanese imports to Saudi Arabia amounted to SR2.83 billion, while inbound shipments from Italy and Switzerland stood at SR2.58 billion and SR2.40 billion, respectively.
According to GASTAT, imports worth SR44.25 billion entered Saudi Arabia via sea, while inbound shipments valued at SR20.47 billion and SR8.65 billion came via air and land, respectively.
King Abdulaziz Sea Port in Dammam was the primary entry point for goods in September through sea in November, with imports valued at SR18.19 billion, representing 24.7 percent of the total inbound shipments.
The authority added that Jeddah Islamic Sea Port handled incoming shipments valued at SR17.58 billion, followed by Ras Tanura Sea Port at SR3.24 billion.
Through land, Al Bat’ha Port and Riyadh Dry Port processed incoming goods valued at SR3.89 billion and SR2.66 billion, respectively.
Through air, King Khalid International Airport in Riyadh welcomed inbound shipments worth SR10.94 billion in November.
King Abdulaziz International Airport and King Fahad International Airport also handled imports valued at SR5.11 billion and SR4.27 billion, respectively.
Saudi Arabia’s carbon credit market leadership paving way for regional unity
Kingdom’s investments in renewable energy and advanced carbon capture technologies are growing
Updated 26 January 2025
Miguel Hadchity
RIYADH: A unified regional carbon market is increasingly likely as Saudi Arabia takes the lead in this growing area of sustainability, experts have told Arab News.
Through Vision 2030, the Kingdom’s investments in renewable energy, advanced carbon capture technologies, and a regulated carbon credit market are growing, driving innovation in these areas.
At the UN Climate Change Conference in Baku on Nov. 12, Saudi Arabia launched its first carbon trading exchange — a platform that places the Kingdom at the forefront of the GCC in this field.
Managed by the Regional Voluntary Carbon Market Co. — a joint initiative by the Public Investment Fund and the Saudi Tadawul Group — the exchange underscores Saudi Arabia’s commitment to sustainability and establishes a model of environmental responsibility for neighboring nations.
The inaugural auction on the exchange brought together 22 local and international companies offering 2.5 million high-quality carbon credits, certified by leading standards like Verra, Gold Standard, and Puro.earth.
These credits largely originate from impactful projects across the Global South, including countries such as Bangladesh, Brazil, and Ethiopia.
The market, projected to grow at a compound annual growth rate of 32.2 percent and reach $3.27 billion by 2030, will also drive investment in carbon capture, storage, and emissions reduction.
“Saudi Arabia is following a careful approach in setting up a carbon market and avoiding the mistakes made by the EU and other regions. Investing in voluntary carbon markets is a part of the Kingdom’s efforts to diversify its economy and achieve its goal of net-zero emissions by 2060,” explained Arun Leslie John, chief market analyst at Century Financial.
At the UN Climate Change Conference in Baku, KSA launched its first carbon trading exchange. (Supplied)
He added: “By establishing a domestic exchange and regulated marketplace for carbon credits, Saudi Arabia is leading the way for local companies to mitigate reputational risk in an increasingly cleaner energy generating world along with generally boosting liquidity conditions.”
The RVCMC has auctioned high-quality credits supporting projects with measurable environmental impact, most notably through initiatives in Africa, where it sold over 1.4 million tons of carbon credits in its first carbon offset auction in 2022.
Approximately 70 percent of these credits were allocated to climate projects across Africa, benefiting countries like Egypt, Mauritania, and South Africa.
Saudi Arabia’s commitment to stringent standards and regulatory oversight in its carbon credit market is setting a benchmark for other GCC countries. Unlike other regional markets, the Kingdom prioritizes quality and transparency.
“By developing standardized frameworks aligned with global benchmarks, the Kingdom can tackle the issue of lack of standardization, ensuring consistency and reliability across the market,” Louay Saleh, principal at Arthur D. Little, told Arab News.
Saleh added: “Saudi Arabia can ensure real impact and limit greenwashing by leveraging advanced technologies such as drones, satellite imaging, and AI. These tools can provide more accurate baselining and measurement throughout the project lifecycle, enhancing transparency and accountability”.
This dedication to transparency strengthens Saudi Arabia’s carbon market and positions it as an attractive destination for international investors, encouraging other GCC nations to adopt similar standards.
Economic opportunities and new revenue streams
The carbon credit market offers substantial economic potential for Saudi Arabia.
The energy sector, including companies like Aramco, is investing in carbon capture and storage technologies that allow them to generate tradable credits.
Investing in voluntary carbon markets is a part of the Kingdom’s efforts to diversify its economy and achieve its goal of net-zero emissions by 2060.
Arun Leslie John, chief market analyst at Century Financial
This potential extends beyond energy to other sectors, such as petrochemicals, aviation, and construction, which could reduce emissions through clean technologies and sell excess carbon credits.
“Industries such as petrochemicals, aviation, construction, agriculture and tourism in Saudi Arabia are most likely to benefit from or contribute to the carbon credit market,” emphasized Saleh, highlighting the extensive opportunities for both new revenue and emission reductions across these sectors.
In parallel with the growth of its carbon credit market, Saudi Arabia has attracted substantial foreign investment through green finance incentives. Programs like the Saudi Green Initiative and the Middle East Green Initiative, paired with green bond issuance, have provided essential funding for renewable energy and carbon capture projects.
The Kingdom aims to achieve a carbon capture capacity of 44 million tons annually by 2025, enhancing its ability to offset emissions and solidify its position as a high-quality carbon credit provider.
A vision for regional cooperation and the unified GCC carbon market
Saudi Arabia’s leadership in the carbon credit market is poised to significantly influence the GCC, as some regional countries are already reinforcing their market frameworks, suggesting the potential for a unified market.
“The outlook for a unified GCC carbon credit market is promising, with Saudi Arabia, the UAE, and Oman making significant steps forward in their respective carbon market infrastructures,” said Carlo Stella, managing partner and global head of sustainability practice at Arthur D. Little.
“Regional cooperation is very likely to facilitate key aspects such as standardization of methodologies, cross-border trading mechanisms, and the development of a shared carbon registry system,” he added.
By developing standardized frameworks, KSA can tackle the issue of lack of standardization, ensuring consistency across the market.
Louay Saleh, principal at Arthur D. Little
Through Vision 2030, Saudi Arabia’s investments in renewable energy, advanced carbon capture technologies, and a regulated carbon credit market are positioning it as a leader in climate action within the GCC, demonstrating that economic growth and sustainability can go hand in hand.
The Kingdom’s carbon credit initiatives are shaping not only its own future but also setting a model for the GCC to follow toward a more sustainable path.
Poised to play a pivotal role in global sustainability, Saudi Arabia’s carbon credit market — driven by large-scale projects, cutting-edge technology, and a commitment to transparency — is leading the GCC on a transformative journey toward climate-responsible economic development.
Through these initiatives, the Kingdom is not only raising the bar for carbon markets but is also creating a blueprint for the region and beyond in green finance and environmental responsibility.
