meed-logo

line1 line2 line3
SIGN IN / REGISTER

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

https://image.digitalinsightresearch.in/uploads/NewsArticle/10553253/main.gif
John Bambridge

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Top deals signed at Dubai Airshow 2025

    27 November 2025

    The Dubai Airshow 2025 drew to a close on 21 November, with deals exceeding $202bn, double the $101bn secured at the 18th edition in 2023. 

    This new milestone reinforces Dubai’s position as a global aviation hub and central force shaping the future of the aviation and space industries, according to a statement from the Government of Dubai Media Office.

    The 19th edition of the event, held at Dubai World Central under the theme ‘The Future is Here’, also drew record attendance, welcoming 248,788 visitors, including industry leaders, government officials and aviation specialists from across the globe. 

    More than 1,500 exhibitors took part, with 440 participating for the first time, along with 490 military and civil delegations from 115 countries. The show also included 21 national pavilions, 98 chalets, an extra 8,000 square metres of display space, and a startup ecosystem with 120 startups and 50 investors.

    One of the most globally diverse editions to date, this year’s airshow featured the usual mega-orders, but also a surprise fleet pivot and an emerging picture of the region’s biggest players taking control of their futures by influencing the development of tomorrow’s jets and securing their supply chains. 

    Anchor customer

    UAE national carriers placed orders for 502 aircraft during the five-day event, with Emirates leading the charge. On the first day of the airshow, Emirates announced a $38bn order for 65 new Boeing 777-9 aircraft. The airline also ordered 130 GE9X engines from GE Aerospace, which power the new twin-engined planes. 

    The deal gives Boeing a boost after the 777-9’s debut was delayed to 2027 – but equally significantly, it provides strong backing for Boeing’s feasibility study to develop the 777-10, a larger variant of its 777X family, as Emirates pushes to replace its Airbus A380 fleet.

    “Emirates has been open about the fact that we are keen for manufacturers to build larger capacity aircraft, which are more efficient to operate, especially with projected air traffic growth and increasing constraints at airports,” said Sheikh Ahmed Bin Saeed Al-Maktoum, chairman and chief executive of Emirates Airline and Group.

    “We fully support Boeing’s feasibility study to develop the 777-10 and have options to convert our latest 777-9 order to the 777-10 or the 777-8.”

    Several days later, Emirates also ordered eight more A350-900 aircraft, worth $3.4bn and powered by Rolls-Royce Trent XWB84 engines, while also urging Airbus to explore a larger version of its A350-1000 wide-body.

    Emirates’ commitment to new aircraft at the Dubai Airshow 2025 is worth $41.4bn at list prices, and brings the airline’s total wide-body aircraft orders to 375, with deliveries scheduled through 2038.

    It was also announced that Emirates would deploy Starlink Wi-Fi across its entire in-service fleet, beginning with Boeing 777 aircraft in November 2025 and completing the rollout by mid-2027.

    Airbus pivot

    Flydubai also signed a memorandum of understanding (MoU) with Boeing to purchase 75 Boeing 737 MAX aircraft valued at $13bn. In one of the show’s biggest strategic shifts, a further MoU was signed with Airbus for 150 A321neo aircraft, making the airline a new Airbus customer.

    Sheikh Ahmed, also chairman and CEO of flydubai, said this addition would diversify the airline’s narrow-body fleet and “enable flydubai to play a key role in the success of Dubai World Central’s expansion plans, an airport we aim to become the largest airport in the world”.

    “We look forward to establishing a strong and enduring partnership between flydubai and Airbus,” he said. 

    Etihad Airways confirmed an order for 32 new Airbus aircraft, including freighters, marking a significant expansion of its wide-body fleet, while Gulf Air, Bahrain’s national carrier, finalised a firm order for 15 787 Dreamliners with options for three more as the carrier looks to further develop its international network. The order adds three Boeing 787s to the airline’s commitment this July and brings Gulf Air’s order book to 17 of the versatile widebody jets.

    Saudi Arabia's emerging airline, Riyadh Air, confirmed a purchase of 120 CFM LEAP-1A engines for its incoming A321neo fleet.

    Taking control

    In a clear sign that Gulf airlines are taking charge of their supply chains, Emirates and France's Safran Seats signed an MoU to bring a manufacturing and plane seat assembly factory to Dubai. The joint industrial cooperation, the first of its kind, will initially focus on Emirates’ business and economy class seats for cabin retrofit projects, with plans to expand into new aircraft in the future.

    “This agreement with Safran marks a pivotal and strategic cooperation that establishes Dubai as an aerospace manufacturing hub,” commented Sheikh Ahmed. “We're bringing world-class seat production capabilities and supply chain to our doorstep, creating highly skilled jobs, and developing capabilities to support Emirates and produce seats for export to other carriers.”

    Emirates is also securing its own engine maintenance capabilities, signing an MoU with Rolls Royce to conduct engine maintenance, repair and overhaul on its own A380 fleet at a new plant in Dubai from 2027.

    Green airline fuel

    Sustainability was a core priority at the airshow, with initiatives including the supply of sustainable aviation fuel (SAF) for participating aircraft, the use of electric and propane-powered ground support equipment in partnership with Jetex, and exhibition halls run entirely on renewable energy.

    On the sidelines of the event, Emirates and Enoc Group signed a memorandum of understanding to explore and develop joint initiatives for the supply of SAF to Emirates at its Dubai hub.

    Defence deals

    Capping the exhibition were the 36 deals signed on behalf of the Ministry of Defence and Abu Dhabi Police by the UAE’s Tawazun council – the national authority mandated to enable, regulate and sustain the UAE’s defence and security industrial ecosystem. Valued at AED25.455bn, the deals included contracts for drones, rescue gear, aircraft parts and support.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15167232/main.gif
    Marianne Makdisi
  • Prequalification begins for Riyadh King Salman Stadium

    27 November 2025

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Sports Ministry has issued a notice inviting companies to prequalify for a contract to design and build the King Salman International Stadium in Riyadh.

    The notice was issued on 26 November, with a prequalification deadline of 16 February.

    The stadium will cover an area of about 660,000 square metres (sq m) and will have a seating capacity of 92,000.

    The stadium will feature a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

    The plan also includes several 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 new stadium will host the final of the 2034 Fifa World Cup and will serve as the Saudi national football team’s main headquarters.

    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.

    Saudi Arabia stadium plans

    In August last year, MEED reported that Saudi Arabia plans to build 11 new stadiums to host the Fifa World Cup in 2034.

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

    An additional 10 cities will host training bases. These are Al-Baha, Jazan, Taif, Medina, Alula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.

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

    The kingdom was officially selected to host the 2034 Fifa World Cup through an online convention of Fifa member associations at the Fifa Congress on 11 December 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15166460/main.jpg
    Yasir Iqbal
  • Morocco signs $861m deal for polysilicon plant

    27 November 2025

    Register for MEED’s 14-day trial access 

    Morocco has signed a MD8bn ($861m) investment agreement with GPM Holding to establish the country’s first polysilicon manufacturing plant in the southern province of Tan-Tan.

    GPM Holding is a US-based company and a key partner in Green Power Morocco (GPM), which specialises in the installation and maintenance of photovoltaic solar panels.

    GPM is a joint venture with UAE-based renewable energy company Amea Power.

    The planned facility will be located in the El-Ouatia industrial zone, according to the North African country’s Ministry of Investment.

    The facility will have an annual production capacity of 30,000 tonnes, with 85% earmarked for export.

    The plant is expected to generate 1,500 direct and more than 2,000 indirect jobs and strengthen Morocco’s position in renewable energy supply chains, particularly in the manufacturing of solar panel components, according to the Ministry of Investment.

    Last year, GPM completed a 34MW solar project in Hjar Nhal, south of Tangier, under a corporate power purchase agreement.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15163133/main.jpg
    Wil Crisp
  • Kuwait plans gas export pipeline

    27 November 2025

    State-owned upstream operator Kuwait Oil Company (KOC) is planning a project to develop a new sour gas export pipeline from booster station 171 (BS-171).

    According to information published by KOC, the pipeline will have a diameter of 24 inches and will run from the facility known as TP-1 to the Intermediate Slug Catcher (ISC).

    The project, which is located in the southeast of Kuwait, will include the installation of bi-directional pig traps above the new pipeline.

    A pig trap is a section of piping that allows the launch or reception of a pipeline pig, a device used to clean the pipeline.

    The chosen contractor will need to provide:

    • Valves
    • Piping
    • Fittings
    • Civil services
    • Structural services
    • Electrical and instrumentation services
    • Tie-ins
    • Testing services
    • Pre-commissioning services
    • Commissioning services

    Kuwait is trying to boost project activity in its upstream sector.

    The country’s national oil company, Kuwait Petroleum Corporation, is aiming to increase oil production capacity to 4 million barrels a day (b/d) by 2035.

    In August, Kuwait announced that it was producing 3.2 million b/d.

    Earlier this month, KOC said it was planning to spend KD1.2bn ($3.92bn) on its exploration drilling programme through 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15163075/main.jpg
    Wil Crisp
  • Emarat awards contract for Dubai airport jet fuel pipeline

    26 November 2025

    Register for MEED’s 14-day trial access 

    Dubai’s Emirates General Petroleum Corporation (Emarat) has awarded a contract for engineering services for a project to build a new jet-fuel supply pipeline to Al-Maktoum International airport in the emirate.

    The contract for end-to-end engineering design services has been won by Bilfinger Middle East, a subsidiary of Germany-headquartered Bilfinger Tebodin.

    The expansion of Al-Maktoum International airport is estimated to be valued at $35bn. The government approved the updated designs and timelines for its largest construction project in April 2024.

    In a statement, the authorities said the plan is for all operations from Dubai International airport to be transferred to Al-Maktoum International within 10 years.

    The statement added that the project will create housing demand for 1 million people around the airport.

    In September last year, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as the lead masterplanning and design consultants on the expansion of Al-Maktoum airport.

    Construction on the first phase has already begun. In May, MEED exclusively reported that DAEP had awarded a AED1bn ($272m) deal to UAE firm Binladin Contracting Group to construct the second runway at the airport.

    The enabling works on the terminal are also ongoing and are being undertaken by Abu Dhabi-based Tristar E&C.

    Construction works on the project’s first phase are expected to be completed by 2032.

    ALSO READ: Dubai selects Al-Maktoum airport substructure contractor

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15160792/main0620.jpg
    Indrajit Sen