Saudi Arabia’s business sector experienced significant growth in May, with most segments witnessing a boom in bank credit. According to the Saudi Central Bank (SAMA), out of the 16 business segments in the National Classification of Economic Activities, 15 registered an annual increase in bank credit during the month. The only segment that saw a decline was agriculture, forestry, and fishing, which fell by 8.06 percent.
One of the sectors that attracted significant bank credit was professional, scientific, and technical activities, which saw a 49.49 percent increase to SR5.01 billion ($1.34 billion) in May, compared to SR3.35 billion in the same month last year. This segment includes a wide range of professional services such as legal and accounting, architectural and engineering, technical tests and analysis, and research and development in scientific fields. The growth in this sector can be attributed to collaborations between state-run institutions and the private sector to promote innovation and entrepreneurship.
The electricity, gas, and water suppliers segment also experienced a significant rise in bank credit, with a 34.79 percent increase to SR124.49 billion in May from SR92.35 billion in the same period last year. This segment includes activities such as generating, transmitting, and distributing electricity, gas, and steam. The Saudi Vision 2030 blueprint aims to replace petroleum with a mix of natural gas and renewable energy for electricity generation, with the Ministry of Energy expected to invest $293 billion in power and renewable energy projects by 2030.
Bank credit to the financial and insurance activities segment rose by 29.41 percent to SR95.77 billion in May. This segment includes national commercial banks, foreign commercial banks, and firms involved in financial technology and cash center management. The demand for financial services has increased alongside the expanding economy, leading to the growth in bank credit.
The real estate activities segment also saw a significant increase in bank credit, rising by 29.39 percent to SR227.36 billion in May compared to the previous year. This growth is fueled by factors such as a growing population, urbanization, and increased demand for housing. The government’s initiatives to address housing shortages and improve affordability have created opportunities for real estate companies to undertake residential projects.
The overall increase in bank credit across various economic segments signifies increased business activity, job creation, and higher production levels, contributing to economic growth and the goals of Vision 2030. It is evident that Saudi Arabia is taking significant steps to diversify its economy and reduce reliance on oil revenues. The Kingdom’s efforts to promote innovation, develop renewable energy sources, and create a conducive regulatory environment for the financial sector have been instrumental in driving these positive developments. As the Saudi economy continues to grow and diversify, it is expected to attract more investments and further strengthen its position on the global stage.
