Saudi Arabia

A multi-billion-dollar development programme under way in Saudi Arabia is proving to be instrumental in helping the government achieve its long-term aim of widening the base of the national economy by heightening activity in the Kingdom’s capital markets.

Increased crude production in Saudi Arabia, combined with rising oil prices, has put the Kingdom on track to generate record annual revenues for the sector, with recent figures from Riyadh-based Jadwa Investments indicating that income could reach a yearly high of $288bn for 2012.

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.