Saudi Arabia to log bumper year in 2015
Saudi Arabia is forecast to record a bumper year in 2015 with a real growth at 10.5 percent year-on-year
Saudi Arabia is forecast to record a bumper year in 2015 with a real growth at 10.5 percent year-on-year and an average growth over the forecast period at 8.7 percent, BMI said in its “Saudi Arabia Infrastructure Report Q1 2015.”
“Saudi Arabia has emerged as one of our choice markets for both scale and growth opportunities over our 10-year forecast period to 2023. We see 2015 being a bumper year of real growth at 10.5 percent year-on-year, with average growth over the forecast period at 8.7 percent. We forecast strong growth across all sectors over the medium term; the residential and non-residential sectors especially will drive growth over the long-term – specifically the industrial construction sector,” the report said.
The report forecast that the transport sector would grow in real terms by 7.7 percent in 2015, with many of the major projects under development being awarded over the past four years, the majority of which will reach completion by 2018. As such we are forecasting a slowdown in the sector – although the rail sector will continue to keep growth elevated.
Moreover, it expects a bounce back in 2015 in the residential and non-residential sector, with 9.9 percent real growth and then for the sector to average 7.6 percent up to 2021.
Owing to heavy capital investment into the energy and utilities sector, it will be the outperforming infrastructure segment over our forecast period in terms of growth.
“We forecast that following three years of strong project awards, the coming four years will see the energy and utilities sector grow particularly strongly,” it added.
Average growth between 2014 and 2018 will stand at 11.8 percent in real terms. As this new capacity comes online by 2018, a slowdown in real growth in the sector is expected, although investment will likely pick up again as Saudi Arabia aims to achieve its goal.
Meanwhile, countries in the MENA region will spend $243 billion – 5.6 percent of the global IT spending – by 2018, a report from Gartner revealed.
“Saudi Arabia, the largest GCC economy, is investing in various digital government initiatives,” adding that the “total spending on IT in the region is expected to increase by 8 percent to reach $12.2 billion in 2014.”
The IT sector spending is expected to be focused on products and services, including internal services, software, IT services, data centers, devices and telecom services.
Other sectors where investments are expected to increase include mobility, Smart government, big data and the Internet of Things (IoT), as well as communications, media and services, banking and securities, government, manufacturing and natural resources.
Among many sectors, spending on telecom services, which include fixed and mobile telecom services, is expected to be the highest throughout the forecast period. – SG
This article was first published in the Saudi Gazette on Thursday, Nov. 19, 2014.