meed-logo

line1 line2 line3
SIGN IN / REGISTER

Resurging projects uplift UAE and Saudi economies

29 January 2024

 

The UAE and Saudi Arabia are almost neck-and-neck – with the UAE marginally in the lead – at the top of the MEED Economic Activity Index, which assesses the near-term economic health of regional markets.

In October 2023, both countries were forecast by the Washington-based IMF to grow at a region-beating rate of 4% in real GDP terms in 2024, though without taking into account the deepening of voluntary oil production cuts in November by half a dozen Opec+ countries, among them Saudi Arabia and the UAE.

In the Q4 Opec+ meeting, in addition to the voluntary cuts announced in April 2023 and extended until the end of 2024, Saudi Arabia and the UAE agreed to cut their oil production by a further 1 million barrels a day (b/d) and 163,000 b/d, respectively, until the end of Q1 2024.

The impact of these additional cuts, as well as the trailing of the oil price below the IMF’s forecast of $79.9 a barrel in 2024, remains to be seen, but – other factors notwithstanding – it should be negative.

In spite of this, some think tanks and ratings agencies have given both countries even more bullish real GDP projections since the start of the year. Aljazira Capital has forecast a 4.4% real GDP growth figure for Saudi Arabia in 2024 and ratings agency Moody’s has projected an even higher 4.6% growth rate.

Aljazira Capital stated that weaker oil revenues “would be offset by growth in non-oil revenues” from the private sector amid the implementation of non-oil spending programmes under Saudi Vision 2030.

For the UAE, ratings agency Standard and Poor’s (S&P) meanwhile forecast 5% growth in 2024 – also driven by the non-oil sector, which grew by 6% in 2023, led by hospitality, retail and financial services.

Beyond the headline figures, both countries are keeping their inflation and fiscal balance in check and have relatively contained unemployment levels. However, Saudi Arabia’s figures of 5.6% unemployment and 23.8% youth unemployment both remain well above average for the GCC countries.

Projects boom

Both countries have also seen a surge in projects activity. Together, they were responsible for the bulk of the $253bn in contracts that made 2023 a record year for regional project activity.

In Saudi Arabia, the total awards value for the year was 59% higher, rising to $95bn – double the long-term average value of project awards over the preceding 10 years. New work also outstripped project completions by a ratio of almost four to one, adding $70bn to the net value of projects under execution.

In the UAE, the value of project awards leapt by 175% to hit $81.5bn – a value almost close to double the long-term average. Significant project completions worth more than $48bn nevertheless weighed on the market and reduced the net change in the value of projects under execution to $33bn.

Other markets

The other GCC countries have mixed outlooks, with varying growth forecasts and projects market activity.

Qatar has a modest 2.2% growth projection for 2024 and has maintained recent project awards at a level matching the rate of completion of legacy projects, as well as the long-term award value average.

Kuwait’s economy was given a 2024 growth forecast of 3.6% by the IMF in October, after contracting in 2023, but this does not include the voluntary production cuts announced in November. The country’s projects market meanwhile continues to slip, with its 2023 awards sitting at just 76% of its average.

The revision of Oman’s 2024 growth forecast by the IMF in January provides a glimpse into the impact of the additional voluntary oil production cuts announced in November for Q1, with the country’s real GDP growth projection for the year having been revised down markedly from 2.7% to 1.4%. The country’s projects market is nevertheless largely holding its own, with its 2023 contract awards clocking in at 88% of the long-term average, even as completions slightly exceeded new awards.

Bahrain continues to struggle with a persistent fiscal deficit and deepening debt, and the squeezing of the country’s cash flow is being reflected in its sinking projects market. The $1.2bn in awards in 2023 flagged 32% behind completions and 65% below the market’s long-term average.

Morocco has increasingly emerged as one of the least troubled markets in the wider Middle East and North Africa region, with a solid 3.6% growth projection for its largely non-hydrocarbons economy. Inflation in the country has also been curbed and the $2.4bn in project awards in 2023 exceeded completions by 24%, despite dipping below the long-term average.

Egypt is heading into 2024 facing severe economic headwinds, with high inflation amid falling foreign exchange reserves and the looming prospect of a further currency devaluation, short of an IMF bailout. The country’s mounting fiscal trouble has been reflected by falling projects activity, with the $12.6bn in awards in 2023 being both below the level of completions and 44% below the long-term average.

Tunisia has a forecast of just 1.9% real GDP growth, but an unexpected burst of $1.5bn in project awards in 2023 boosted projects activity – with the value nearly double both completions and average awards.

Algeria, Iraq and Jordan face various headwinds, but chief among their problems is that their middling growth rates are insufficient to accommodate either their rising debt or double-digit unemployment. All three countries also had projects markets that underperformed in 2023, with award values below both the level of completions and long-term averages.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11466710/main1207.gif
John Bambridge

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

Click here to register
Exclusive from Meed
Related Articles
  • Jordan starts international stadium construction works

    18 June 2026

    Register for MEED’s 14-day trial access 

    Jordan has started preliminary excavation and site preparation work at its Al-Hussein Bin Abdullah II International Stadium, located east of the capital city of Amman.

    The project is part of the first phase of the Amra City development master plan.

    The development is being implemented by Jordan Cities & Facilities Development Company, a Jordan Investment Fund-owned company.

    The main works are expected to begin early next year, with the stadium slated for completion in 2029.

    The project will cover an area of about 1 million square metres and the stadium will have a capacity of 50,000 spectators.

    The stadium is being built within the Amra City development, which is located about 40 kilometres (km) from downtown Amman and 35km from Zarqa City and Queen Alia International airport.

    The project forms part of Jordan's Economic Modernisation Vision (EMV) 2023-25.

    The EMV – Amman’s flagship reform programme – aims to increase real income per capita by an average of 3% annually, create 1 million jobs, and more than double the country’s GDP over the next decade.

    The strategy envisages a leading role for the private sector, which is expected to account for 73% of the estimated $58.8bn investment required.

    To achieve these targets, a substantial pipeline of public-private partnership (PPP) projects is planned in sectors including water desalination, school construction, clean energy, green hydrogen, transport and road infrastructure.

    Last year, the PPP unit at the Investment Ministry said it was targeting seven key PPP projects in 2025.

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

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17325757/main.png
    Yasir Iqbal
  • Chinese firms win $506m Saudi housing project deals

    18 June 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Municipalities & Housing Ministry has awarded contracts worth over SR1.9bn ($506m) to Chinese contractors for two residential developments in the kingdom.

    The first contract has been awarded to China Architectural Construction Corporation for the construction of 2,010 housing units at the Al-Ruba residential project in Riyadh. The contract value is SR875m ($233m).

    The other contract has been awarded to China State Construction Engineering Corporation for the Al-Rasha Al-Faisaliah residential project in Dammam. The project comprises 2,426 housing units, and the contract value is over SR1bn ($266m).

    The contracts were announced during the official visit of Majed Al-Hogail, Saudi Municipalities & Housing Minister, to China, where he also signed six memorandums of understanding (MoUs) between Saudi and Chinese firms. The MoUs aim to accelerate housing development, localise advanced construction technologies and enhance public-private sector collaboration.

    MEED reported in 2020 that Riyadh planned to oversee the development of more than 1 million homes by 2025 to meet growing demand in the kingdom.

    By 2030, the Saudi capital aims to more than double its population, from 7-8 million to 15-20 million, and to become one of the 10 wealthiest cities in the world.

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

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17322994/main.png
    Yasir Iqbal
  • Diriyah awards $727m Waldorf Astoria superblock deal

    17 June 2026

     

    Saudi gigaproject developer Diriyah Company has awarded a SR2.7bn ($727m) contract for the main construction works on the development’s Waldorf Astoria superblock.

    The contract was awarded to the joint venture of Hassan Allam Construction Saudi and UCC Saudi, the local branch of Qatar’s Urbacon Holding.

    The Waldorf Astoria superblock is a mixed-use development comprising a Waldorf Astoria hotel, Waldorf Astoria-branded residences, commercial and residential facilities, and office space.

    The Waldorf Astoria hotel will feature 200 keys, while the residential component will comprise 47 branded residences.

    The project is located on the Grand Boulevard South and Northern Arterial Road in the Boulevard Northwestern district at Diriyah Gate 2. 

    Diriyah Company tendered the contract in November last year, with submissions due in January, as MEED reported.

    Diriyah Company Group CEO Jerry Inzerillo said: “We are delighted to announce this latest major construction contract for the Waldorf Astoria superblock as we continue to progress at pace across the Diriyah development area. The Waldorf Astoria will be a world-class addition to our growing portfolio of globally renowned hospitality brands, further strengthening Diriyah’s appeal as a globally significant destination that offers world-class hospitality and lifestyle experiences.

    “Together with our partners, we look forward to delivering another landmark development that supports the kingdom’s Vision 2030 ambitions and contributes to the continued growth and success of Diriyah.”

    Hassan Allam, chairman and CEO of Hassan Allam Holding, said: “We are proud to support the development of one of the kingdom’s most ambitious and transformative destinations and to continue our partnership with Diriyah Company in bringing its vision to life.

    “Drawing on more than 90 years of experience across the Mena region, we remain committed to delivering the highest standards of quality and excellence on landmark projects that are helping shape the kingdom’s future.”

    Ramez Al-Khayyat, UCC Holding president and group CEO, said: “Being awarded this contract by Diriyah Company marks another important milestone in our growing partnership and reinforces our shared commitment to delivering world-class developments across the kingdom. This project builds on our ongoing collaboration in Diriyah, including the delivery of four luxury hotels and the Royal Diriyah Equestrian and Polo Club in Wadi Safar.

    “We value the opportunity to contribute once again to one of Saudi Arabia’s most ambitious and prestigious urban development destinations, supporting the vision of creating a world-class cultural, hospitality and lifestyle hub.”

    The latest award follows Diriyah Company’s award of an estimated SR730m ($195m) construction contract for civic quarter buildings within the Diriyah development to local contractor Al-Rashid Trading & Contracting Company (RTCC).

    In April, Diriyah announced a SR1.84bn ($490m) construction contract to build the Saudi Arabia Museum of Contemporary Art (SAMoCA) within the Diriyah development. The contract was awarded to a consortium of Egyptian contractor Hassan Allam Construction Saudi and Saudi Arabia’s Albawani.

    In March, Diriyah Company awarded an estimated SR2.5bn ($666m) contract to build the Pendry superblock in the DG2 area.

    The Pendry superblock includes the construction of the Pendry Hotel alongside residential and commercial assets. The package will cover 75,365 square metres and is located in the northwestern district of the DG2 area.

    The previous month, Diriyah Company also awarded a SR717m ($192m) contract for the construction of the One Hotel, located in the Diriyah Two area of the masterplan, with a gross floor area of more than 31,000 sq m.

    The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17287718/main.jpg
    Yasir Iqbal
  • AHS Properties acquires Shangri-La hotel for $300m

    17 June 2026

    Dubai-based real estate developer AHS Properties has announced the acquisition of the Shangri-La hotel for AED1.1bn ($300m), marking one of the largest single-asset real estate transactions in recent years.

    AHS Properties acquired the hotel from local firm Mismak Asset Management.

    The Shangri-La Hotel is a 43-storey, 200-metre tower located on Sheikh Zayed Road. Completed in 2003, it was among the first five-star hotels to open along the corridor.

    The acquisition expands AHS Properties’ portfolio, which includes AHS Tower, a Grade A commercial development on Sheikh Zayed Road, and AHS City, the company’s master-planned mixed-use community on the same corridor.

    In a statement, AHS Properties said that AHS Tower, AHS City and the Shangri-La hotel form a strategic “vertical corridor” platform, representing a significant portion of the company’s AED50bn development pipeline through the end of 2026.

    “The transaction reflects AHS Properties’ strategy of deploying capital into high-quality, supply-constrained assets,” the statement added.

    According to the Dubai Land Department, Dubai’s real estate sector recorded AED252bn in transactions in Q1 2026.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17310101/main.jpg
    Yasir Iqbal
  • UAE moves to clear the path for recovery

    17 June 2026

    Commentary
    Colin Foreman
    Editor

    More than three months after the conflict began to disrupt business across the Gulf, the UAE is moving to resolve the technical challenges that the economy faces as it shifts towards recovery.

    The insurance gap has been a key obstacle to the recovery of aviation and tourism. Several countries continue to maintain advisories against travel to the Gulf, making it difficult or impossible for visitors to obtain conventional cover for trips to or through the region. The concern is twofold: one, becoming stranded should hostilities resume, and two, not being able to secure medical insurance. Both Emirates and Etihad have now moved to address that directly, offering insurance to passengers flying to or through their respective home hubs. The Etihad scheme, backed by DCT Abu Dhabi and underwritten by Daman, will run from July to December and covers eligible visitors for up to 15 days.

    The second area of concern is real estate. Anecdotally, buyers in sectors economically exposed to the conflict have found it increasingly difficult to obtain mortgage financing, a problem that has become especially acute at the point of handover. The recently signed partnership between Dubai Holding Real Estate and Commercial Bank of Dubai is designed to ease that pressure. The programme opens financing from the 30% construction stage once buyers have met a 50% payment threshold, giving purchasers earlier visibility of their borrowing capacity and reducing uncertainty during the off-plan purchase process.

    Taken together, the two initiatives show that the UAE is proactively addressing the technical hurdles as and when they arise. As the recovery gathers momentum, more challenges will surface. The capacity and willingness to address them as they emerge will be crucial to a meaningful recovery.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17306586/main.jpg
    Colin Foreman