Meed | Saudi leads MEED’s latest economic activity index

Saudi leads MEED’s latest economic activity index

31 January 2023

Saudi Arabia has continued to sit atop the MEED Economic Activity Index with the close of 2022, as its repeat of another bumper year of project contract awards set it well clear of the next most competitive regional projects market.

The index has generally seen the division between energy exporters and importers sharpen, with the former enjoying current account and, for the most part, fiscal surpluses, and the latter invariably facing trade deficits and persisting fiscal deficits.

High inflation, compounded by rising interest rates and high fuel prices, continues to erode economic prospects in the region. It has also pressured the finances of countries with artificially high currency pegs. Egypt has been forced to drop its currency peg three times in the past year, leaving it increasingly at the mercy of inflation.

Saudi Arabia stands largely apart from these pressures as the region’s largest oil producer. Its inflation rate in 2023 is projected by the IMF to be a minimal 2.2 per cent. While its rate of real GDP growth is expected to come down from 7.6 per cent in 2022 to 3.7 per cent in 2023, this remains high amid the glum projections that up to a third of the global economy could enter recession this year.

Together with the UAE, Qatar, Kuwait and surprisingly Iraq, Saudi Arabia is expected to maintain a double-digit current account surplus in 2023, as well as a fiscal surplus, despite the kingdom’s rising project spending.

There is a further $95bn-worth of project value in the bidding stage [in Saudi Arabia], boding well for the potential of 2023 to be another bumper – if not record – year for the Saudi contracting sector

Project potential

Saudi Arabia’s project market maintained its momentum in 2022, seeing the award of 53bn-worth of project value, 1.3 per cent more than in 2021 and 46 per cent higher than the annual average over the preceding five years.

The award figure also exceeded the value of projects coming to completion over the course of the year by $21bn – a strong net positive result for the market.

There is a further $95bn-worth of project value in the bidding stage, boding well for the potential of 2023 to be another bumper – if not record – year for the Saudi contracting sector.

Mixed performances

The UAE, while retaining the second position in the index, has seen its score slip. Despite having strong real GDP growth and fiscal projections for 2023, the country remains well down from historic highs – the $18.7bn-worth of project awards in 2022 was just 53 per cent of the $35.1bn average in 2017-21. The market also shed $20bn in value as completions outstripped awards.

The $56.4bn of projects in bidding and due for award in 2023 makes the prospect of a turnround a possibility, but there is no guarantee given the global uncertainty.

Qatar has meanwhile risen strongly in the index since the third quarter of 2022, despite a real GDP growth projection by the IMF of just 2.4 per cent in 2023 – as the boost to non-oil GDP from the Fifa World Cup wears off.

Qatar’s project awards also fell in 2022 following a spike in 2021. The $14bn of awards in 2022 nevertheless remained almost level with the five-year average.

Kuwait also has a slightly lower real GDP projection in 2023, but strong overall fundamentals. Project activity also continues to tick over in the country, albeit at a slower than usual pace. The country has $27.6bn-worth of projects in the bid stage – a figure nearly 10 times the $2.8bn-worth of awards in 2022, which fell well below the $5.6bn average for the preceding five years.

The remaining GCC nations, Oman and Bahrain, and another Gulf energy exporter, Iraq, all also boast healthy current account surpluses. From there however, the countries diverge.

Oman is in a much better position heading into 2023, having stabilised its fiscal situation and eliminated its deficit. The country also has the lowest forecast consumer price inflation rate in the region heading into 2023, at just 1.9 per cent. Furthermore, the country has a burgeoning $19.7bn-worth of projects in the bid stage that could soon bolster its projects market.

Bahrain continues to struggle with both a persisting fiscal deficit and a debt burden – equivalent to about 120 per cent of its GDP. The country’s projects market slumped in 2022, with the less than $1bn of contract awards compared to $2.6bn in completions.

Iraq remarkably sits just below the GCC countries in the index thanks to its oil-fuelled GDP growth and twin double-digit current account and fiscal surpluses. Iraq’s project activity nevertheless fell away in 2022, which saw just $5bn-worth of awards – compared to $17bn the previous year and a $12bn five-year average. The $28bn-worth of projects in the bidding stage could nevertheless make for better things to come.

Egypt’s projects market has recently been in the ascendant, but its broader economic fortunes are now in sharp decline. The full impact of the country’s currency crisis has yet to be revealed, but Cairo already has twin current account and fiscal deficits.

Iraq remarkably sits just below the GCC countries in the index thanks to its oil-fuelled GDP growth and twin double-digit current account and fiscal surpluses

Facing challenges

Algeria, Morocco, Jordan and Tunisia are all struggling to break even in the current economic climate and have double-digit unemployment. This is ironic in the case of Algeria, which is an energy exporter with a current account surplus and yet double-

digit fiscal deficit.

Below this, Iran continues to be hampered by sanctions, creeping economic malaise and an estimated 40 per cent consumer price inflation rate amid a steadily collapsing import subsidies regime.

Libya, despite resurgent oil growth, has nearly 20 per cent unemployment and 50 per cent youth unemployment due to the civil war. Reconstruction efforts in the country also showed signs of stalling in 2022 as the project award value dropped off, with many projects stuck in the bid stage.

Yemen and Lebanon close out the index with dismal economic performances due to their respective ongoing conflict and economic crisis. Remarkably, with almost one-in-three out of work and unchecked inflation, Lebanon is managing to underperform even Yemen.

About the index

MEED’s Economic Activity Index, first published in June 2020, combines macroeconomic, fiscal, social and risk factors, alongside data from regional projects tracker MEED Projects on the project landscape, to provide an indication of the near-term economic potential of Middle East and North African markets.

View the November 2022 index here

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John Bambridge

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Saudi Arabia raises electricity tariffs
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Dubai Municipality confirms AED3bn Tasreef drainage awards
26 October 2026
Nakheel awards $259m Dubai Islands buildings contract
26 October 2026
Morocco plans second high-speed rail phase to Agadir
26 October 2026
Riyadh tenders King Salman Stadium works
26 October 2026

Saudi Arabia raises electricity tariffs
26 October 2026

Saudi Energy, formerly Saudi Electricity Company, has announced revised electricity tariffs, which will take effect on 1 January 2027.

The revised tariff schedule, published on the company’s official website, covers residential, commercial, industrial, agricultural, charitable and government customers.

The largest percentage increase in consumption rates is 16.7%, for residential customers using up to 6,000 kilowatt-hours (kWh) a month. Residential customers will pay 21 halalas/kWh for monthly consumption of up to 6,000kWh, up from 18 halalas. For consumption above 6,000kWh, the rate will rise from 30 to 33 halalas/kWh, a 10% increase.

The industrial tariff will increase by 15%, from 20 to 23 halalas/kWh. Commercial customers, private healthcare facilities and private educational facilities will pay 25 halalas/kWh, up from 22 halalas, for consumption up to 6,000kWh a month, and 35 halalas/kWh above that level, up from 32 halalas.

Tariffs for charities and government customers will also increase. In addition to consumption-based charges, customers will pay a fixed monthly fee based on the capacity of their electricity meter. This replaces the previous separate charge for meter reading, maintenance and billing, with VAT applied to the revised tariffs.

Electricity investment

The new tariffs coincide with changes to water consumption tariffs announced by the National Water Company, also effective from 1 January 2027.

King Salman Bin Abdulaziz Al-Saud directed support measures following a proposal presented by Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.

This includes raising the minimum wage required for Saudi nationals to count as full employees towards private sector localisation quotas under the Nitaqat programme.

The tariff changes come as Saudi Arabia plans substantial investment in its electricity infrastructure. In September 2025, Saudi Energy announced plans to invest SR220bn ($58.7bn) in power infrastructure projects between 2025 and 2030.

A June 2025 report by Fitch Ratings forecast negative free cash flow of about SR16bn a year over the period and rising leverage, reflecting the financial demands of the programme.

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Mark Dowdall
Dubai Municipality confirms AED3bn Tasreef drainage awards
26 October 2026

Dubai Municipality has confirmed it has awarded four contracts worth AED3bn ($817m) to expand the emirate’s stormwater drainage network by about 100 square kilometres under phase three of the Tasreef programme.

The projects will cover Jumeirah, Umm Suqeim, Al-Quoz, Al-Barsha, Al-Wasl and Al-Marmoom. The works include constructing and extending main stormwater drainage lines with diameters of up to three metres.

The four packages are part of Dubai’s AED30bn Tasreef programme, which aims to increase the emirate’s stormwater drainage capacity by 700% and reduce costs associated with pumping stations, network operations and maintenance by 20%.

The contracts have been awarded to China State Construction Engineering Corporation (CSCEC) and three local firms: Arifco Group, Nael Construction & Contracting (NCC) and Detech Contracting. Dubai Municipality did not state which projects the awards relate to.

According to sources, the contract awards include packages TF-15-C1, TF-15-C2 and TF-13-C1.

The first package, TF-15-C1, involves the construction of 21 kilometres of main and secondary drainage lines along Al-Wasl Road and in surrounding areas. It will cover Za’abeel 2, Al-Wasl, Jumeirah 1 and 2, Al-Bada’a, Al-Satwa and Dubai World Trade Centre. The estimated $100m contract was awarded to Detech in July, as exclusively reported by MEED.

The second package, TF-15-C2, covers the corridor between Sheikh Zayed Road and Al-Khail Road. It includes about 14km of main drainage lines serving Al-Quoz Industrial Areas 1, 3 and 4, and Al-Barsha 1. In July, MEED reported that CSCEC had won the engineering, procurement and construction contract for this project.

The third package, TF-13-C1, covers Al-Marmoom, where 23km of drainage infrastructure will be developed. According to a source, Arifco has been awarded this contract.

The final package covers Jumeirah and Umm Suqeim, where about 42km of main drainage lines will serve Umm Suqeim 1, 2 and 3; Umm Al-Sheif; Jumeirah 3; Al-Safa 1 and 2; and Al-Manara.

In May, MEED reported that NCC had been awarded a contract to build a sewage and stormwater drainage system, DS-204. However, it is unconfirmed whether this relates to the same project.

Earlier, in February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

These included two contracts awarded to Detech and one to CSCEC for stormwater drainage infrastructure. In addition, two consultancy contracts were awarded for the study and design of drainage systems in selected areas across the emirate.

Cumulatively valued at AED2.5bn, the new projects will serve 30 vital areas, spanning approximately 430 million square metres and supporting an estimated population of three million residents by 2040.

Previously, in April 2025, an earlier package of awards was announced under phase one of the Tasreef programme. The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

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Nakheel awards $259m Dubai Islands buildings contract
26 October 2026

Dubai-based master developer Nakheel, part of Dubai Holding Real Estate, has awarded local firm Parkway International Contracting a construction contract valued at about AED950m ($259m) for phases two and four of Bay Grove Residences on Dubai Islands.

The package covers 617 residential units across eight buildings, ranging from one to four bedrooms, together with basement structures, infrastructure and community amenities including swimming pools, sports courts and fitness centres.

Phase two comprises 360 homes across four buildings, with main construction scheduled for completion in late 2028.

Phase four includes 257 homes across four buildings, with completion targeted for the second quarter of 2029.

The award follows an earlier contract valued at about AED800m ($218m) awarded to local contractor Metac General Contracting Company for phases one and three, covering 537 homes across seven buildings.

Together, the two contracts total more than AED1.75bn ($476m) and account for all 1,154 planned homes across the 15 buildings of Bay Grove Residences.

Project activity on Dubai Islands has gathered pace in recent months. Earlier this month, Nakheel awarded local firm Mar Marine & Building Contracting a contract for marine and coastal works on Island B. The scope includes constructing breakwaters, removing existing rock revetments and creating a new 320-metre beach near the Bay Villas development, as well as remedial and refurbishment works along approximately 3 kilometres of the island’s western shoreline.

In August 2025, Nakheel awarded Fibrex Contracting a AED2.6bn ($708m) construction contract for the Bay Villas residential project. That followed a AED527m ($143m) contract awarded to Al-Nasr Contracting Company in April 2026 for primary infrastructure and utilities on Island B.

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Yasir Iqbal
Morocco plans second high-speed rail phase to Agadir
26 October 2026

Morocco has outlined a second rail investment cycle for 2030-35, which includes beginning construction of a high-speed rail extension from Marrakech to Agadir and connecting Essaouira to the national rail network.

The pipeline forms part of the government’s 2026-31 programme, presented to parliament last week.

The Marrakech-Agadir link is estimated to cost close to MD55bn ($5.5bn) and will cover a 240-kilometre (km) route through the High Atlas Mountains via Chichaoua. Civil engineering structures, including tunnels and viaducts, are expected to account for nearly 70% of the alignment.

In September, the government issued a decree declaring the Marrakech-Agadir and Chichaoua-Essaouira rail corridors to be of public utility, paving the way for land acquisition and expropriation procedures.

Under the long-term masterplan Plan Rail Maroc 2040, Essaouira is expected to connect to the network via a separate line branching off at Chichaoua, designed for operating speeds of up to 200km an hour. The mainline to Agadir is designed for speeds of up to 320km/h.

The 2030-35 cycle also includes rehabilitating the Casablanca-Khouribga-Oued Zem line; constructing a new line between Oued Zem and Beni Mellal via Bejaad, with a branch to Fquih Ben Salah; doubling and upgrading the 140km Benguerir-Safi line; expanding capacity on the Fez-Oujda corridor; and building new-generation passenger stations.

The plans follow Morocco’s ongoing MD134bn ($13.4bn) 2024-30 rail investment programme, which focuses on completing the Kenitra-Marrakech high-speed line ahead of the 2030 Fifa World Cup.

The programme also includes developing regional express network services across five regions, electrifying the Fez-Oujda line and completing a freight rail link to the Nador West Med port.

Work on the Kenitra-Marrakech line had reached about 30% by May 2026, with commercial services targeted to begin in September 2029.

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Riyadh tenders King Salman Stadium works

26 October 2026

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Saudi Arabia’s Sports Ministry has tendered a contract covering early works at King Salman International Stadium in Riyadh.

The scope includes enabling works, site preparation and initial construction activities.

The tender was issued on 11 October, with a submission deadline of 19 November.

The stadium will cover about 660,000 square metres (sq m) and seat 92,000. Facilities will include a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

The wider development will include sports facilities covering more than 360,000 sq m, including two training fields and fan zones; a closed sports hall; an Olympic-sized swimming pool; an athletics track; and outdoor courts for volleyball, basketball and padel.

The stadium is set to host the final of the 2034 Fifa World Cup and will serve as the Saudi national football team’s main base.

US-based architectural firm Populous is the lead architect for the stadium.

Construction of the stadium is expected to be completed by 2029.

The stadium will be located next to King Abdulaziz Park.

Firms submitted prequalification statements for the main design-and-build contract in February.

Saudi stadium plans

In August 2024, MEED reported that Saudi Arabia planned to build 11 new stadiums and refurbish four facilities for the 2034 Fifa World Cup.

Eight stadiums will be located in Riyadh, four in Jeddah and one each in Al-Khobar, Abha and Neom.

A further 10 cities will host training bases: Al-Baha, Jazan, Taif, Medina, Alula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.

There are expected to be 134 training sites in the kingdom, including 61 existing facilities and 73 new venues.

Saudi Arabia was officially selected to host the 2034 Fifa World Cup during an online convention of Fifa member associations at the Fifa Congress on 11 December 2024.

READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF