Saudi real estate returns to form

With the Saudi oil sector expected to generate less revenues this year, the non-oil sector will need to step up and carry the burden of generating growth for the economy. Construction is going to be a key driver. More than US$50 billion of contracts were awarded last year, and another  US$70  billion  expected  to  be awarded this year.

While traditional oil and petrochemicals sector will get their fair share of investments, the government is increasingly focused on social sectors, including healthcare and education as the government looks to negate pressure for political reforms, according to Global.

“Anticipated capital expenditure for 2013 includes construction of 539 schools, 19 hospitals and development of 3,700-km roads across the kingdom. Ongoing government spending on transport and social services is W ith the Saudi oil sector expected to generate less revenues this year, the non-oil sector will need to step up and carry the burden of generating growth for the economy. Construction is going to be a key driver. More than US$50 billion of contracts were awarded last year, and another  US$70 billion expected to be awarded this year.

While traditional oil and petrochemicals sector will get their fair share of investments, the government is increasingly focused on social sectors, including healthcare and education as the government looks to negate pressure for political reforms, according to Global.

“Anticipated capital expenditure for 2013 includes construction of 539 schools, 19 hospitals and development of 3,700-km roads across the kingdom. Ongoing government spending on transport and social services is expected to keep the services sector vibrant,” said Global. “Under the Ninth Development Plan, the government intends to invest US$30 billion in the transport and communications sector, and US$74 billion in social and health services.”

With inflation reined in at 3.8% this year, the Saudi authorities will be keen to further massage the non-oil sector and extract growth for the economy, as the oil sector take a breather after a few years of robust growth.