The COVID-19 pandemic has in most countries caused significant disruption to the Projects, market and Saudi Arabia has been no exception. As the coronavirus took hold and the kingdom went to economic lockdown in the Spring, the government announced a raft of measures including a cut back in Projects, spending as its revenues from oil sales declined sharply.
However, data from the first six months of the year shows that Saudi Arabia has weathered the storm fairly well. At $13.2bn the value of contracts awarded between January and June was just 15% down on the same period in 2019 and actually higher than the same period in 2017 and 2018.
The figures highlight the intent with which the government is development its capital Projects, programme. Schemes like the PIF Projects, are being prioritised backed by proceeds from the sale of shares in Aramco and increased state borrowing. The increasing emergence of PPP Projects, is another sign that Riyadh is exploring different options to finance its 2030 Vision.
Despite this, there is no doubt that 2020 will end up being a very difficult year. This reflected by the revised forecast in which we anticipate a total of $32bn worth of contracts to be awarded for the year as a whole in a best-case basis, down from $48bn awarded in 2019.
It is unclear how quickly the market will recover in 2021 and beyond. Much will depend on the oil price which still lies $20 a barrel lower than it did at the start of the year. If it stays at its current levels, it is difficult to see how the government can maintain spending at historical levels.
Written by MEED, the Middle East market experts within the GlobalData Group, "Saudi Arabia Projects, H2 2020", is the update to this year’s H1 report. Focused on data, it is aimed at helping companies create strategies for targeting and growing the market.
Reasons To Buy
- Opportunities and challenges in the kingdom’s Projects, market
- Analysis of the pipeline of planned Projects, and contract awards 2020-2022
- Key policies and drivers shaping the outlook for Projects, in Saudi Arabia
- Political and economic background
- The barriers and challenges that may arise
- Sector-by-sector breakdown of future project plans
- Key drivers of Projects, in each sector
- Saudi Arabia’s most valuable key Projects, and major project sponsors