IMF set to open regional HQ in Riyadh after Saudi Cabinet approval

RIYADH: Saudi Arabia’s non-oil private sector saw its strongest growth for a decade in January, with the Kingdom’s Purchasing Managers’ Index rising to 60.5, driven by surging new orders and business activity, a new survey showed. 

The seasonally adjusted Riyad Bank PMI, released by S&P Global, jumped from 58.4 in December to its highest level in ten years, signaling robust momentum in the non-oil economy at the start of 2025.

This comes as Saudi Arabia’s push to expand its non-oil sector delivered a 19.7 percent year-on-year rise in exports in November to SR26.92 billion ($7.18 billion), with Minister of Economy and Planning Faisal Al-Ibrahim revealing that such activities now account for 52 percent of the Kingdom’s gross domestic product, further bolstering its economic transformation. 

Saudi Arabia’s PMI in January surpassed that of other countries in the region such as Egypt and Kuwait, indicating that the Kingdom’s non-oil sector growth is in line with the goals outlined in Vision 2030.

“This strong performance underscores the resilience of the non-oil private sector, fueled by surging new orders and a significant rise in business output. The Output Index, reaching its highest level in 18 months, underscores strong demand conditions, with nearly 30 percent of firms reporting higher activity levels,” said Naif Al-Ghaith, chief economist at Riyad Bank. 

The expansion was fueled by a surge in new orders, growing at the fastest pace since June 2011, with nearly 45 percent of businesses reporting higher sales, driven by favorable economic conditions, rising infrastructure investments, and Vision 2030 diversification efforts. 

He said the rise in export orders complemented domestic demand, particularly from Gulf Cooperation Council countries, reflecting effective marketing and competitive pricing strategies.  

The hiring trend remained positive, with employment levels rising for the ninth consecutive month. As businesses sought to keep up with increasing demand, many expanded their workforce, helping to reduce backlogs of work.  

“Employment trends underline this positive sentiment, as companies continued to expand their workforce to meet growing demand. Supply chain improvements, combined with higher purchasing activity, have bolstered operational efficiency and prepared businesses for sustained growth,” concluded Al-Ghaith. 

Despite the rapid expansion, the report noted that supply chain conditions improved, as delivery times shortened to their best levels in 10 months. Businesses also increased their stock levels, with inventory levels reaching their second-highest point in survey history. 

“These indicators highlight the progress being made toward Saudi Arabia’s Vision 2030, as the economy diversifies and strengthens its non-oil foundations,” said Al-Ghaith. 

While the non-oil sector enjoyed significant growth, input costs continued to rise, driven by higher raw material prices and geopolitical uncertainties. 

Survey data indicated that inflation was at its second-highest level in nearly four-and-a-half years, prompting many businesses to pass on costs to consumers by raising their output prices at the fastest pace in a year.  

Despite inflationary pressures, businesses remain optimistic about the economic outlook for 2025, anticipating sustained growth driven by infrastructure investments, strong market conditions, and rising demand at home and abroad. 

ISLAMABAD: Pakistan and Saudi Arabia have signed a Memorandum of Understanding to increase collaboration in public sector auditing through enhanced cooperation between audit institutions of both countries as well as training programs and the exchange of trainers, a spokesperson for the Auditor-General of Pakistan’s office said on Monday.

The development comes during a four-day visit to Pakistan by a delegation of Saudi Arabia’s General Court of Audit, led by GCA President Hussam bin Abdulmohsen Al-Angari, which arrived on Sunday.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Muhammad Raza Irfan, a public relations officer at the AGP’s office, told Arab News the agreement will not only strengthen professional relations between auditing institutions of both countries, but also further promote bilateral cooperation between Pakistan and Saudi Arabia.

“This collaboration marks a significant step toward fostering international cooperation in auditing,” AGP Gondal was quoted as saying in a statement issued from his office.

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two sides agreed to share best practices in audit standards, performance audits, and citizen participatory audits, and expand expertise in thematic, environmental and impact audits.

“It also agreed to collaborate on training programs, exchange trainers, address emerging auditing challenges and plan cooperative audits, including a performance audit on the oil and gas sector in 2025,” the statement read.

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Dr. Alangari praised Pakistan’s initiatives in modernizing audit practices and expressed his enthusiasm for future collaborations, according to the AGP office.

“The partnership between our two SAIs is a testament to the shared vision of accountability and transparency,” the GCA president was quoted as saying.

“We are eager to build upon this momentum and address challenges collectively, ensuring value addition to public sector auditing globally.”

The meeting underscored the importance of international collaboration to address emerging challenges and leverage innovative technologies in auditing.

“The Saudi side also announced the launch of the second phase of the Fund for Improved SAI Performance, which is scheduled for mid-February,” the statement said.

“The office of the AGP was also offered to apply for the second phase of FISP, which provides funds of up to $40,000.”

The GCA’s FISP initiative is aimed at providing funding to SAIs in developing countries to help them improve their performance and capacity in conducting audits and upholding accountability within their respective governments.

Pakistan and Saudi Arabia are close regional partners and economic allies, and both countries signed 34 agreements worth $2.8 billion in October last year. The Kingdom is home to over 2 million Pakistani expatriates, serving as the top destination for remittances for the cash-strapped South Asian country.