Saudi Arabia

Although growth is expected to ease in Saudi Arabia’s competitive insurance sector this year, the industry still holds plenty of potential for expansion, particularly in the health and life segments.

Several of Saudi Arabia’s major cities – Jeddah, Riyadh and Mecca – and surrounding areas will benefit from plans to roll out public transport and construction projects over the next five years as part of a government drive to boost growth and address the Kingdom’s social needs.

Steel producers in Saudi Arabia are set for a busy few years, with growth in the industry driven by rising demand due to state-backed investments and increasing activity in the private sector. However, even with additional capacity, the sector is working to bridge the supply gap.

New legislation paving the way for Saudi Arabia’s banks to provide mortgages to clients should see the loan portfolios − and earnings − of the majority of the Kingdom’s lenders expand substantially. However, market conditions and the sector’s own inherent caution could limit the number of mortgages granted, at least until the market becomes more developed and is tested.

The real estate sector is set for a boost after new legislation allowing banks to offer mortgage products to home buyers was given final approval, a move that should encourage many young Saudis to shift from renting to ownership. It may take time, however, for both banks and customers to acclimatise themselves to the conditions of the Kingdom’s new property market.

With strong consumer confidence and a sound economic outlook for the immediate future, Saudi Arabia’s retail sector appears set for a good year of trading. Concerns over rising inflation, particularly with Ramadan underway, however, mean that consumers may begin eyeing price tags more carefully.