The economic composition of Saudi Arabia, which largely remained dependent on oil exports, is changing at a rapid pace, as the progressive policies of the incumbent crown Prince Muhammad Bin Salman (MBS) are changing the economic outlook of the kingdom.
Saudi Arabia is the largest exporter of oil, so the demand for real estate was always high in the country. But this demand has risen even sharply in recent days, making real estate a lucrative business in the kingdom.
A New Riyadh complex owned by a real-estate giant Abdulsalam Almajed sold 300 apartments like hot cakes in the kingdom, that too without any advertisement.
According to Almajed, the upcoming social and economic changes in Saudi Arabia, inspired by MBS’s landmark programs, are changing the mindset of locals, who are now seeing beyond oil markets.
Even the designs and styles of houses are changing from more conservative to progressive ones inspired by the western style of construction.
Saudi Leadership Goes Progressive
Most political observers and human rights watchdogs have hammered crown prince MBS for his repeated attempts to commit human rights violations since assuming power in 2015. While he remained reluctant to address most of these concerns, his attempt to change the culture of the kingdom by relaxing restrictions on the modes of entertainment and the intermixing of men and women in different types of events has attracted many western investors.
Almost ten years ago, it was nearly impossible for women to take houses for rent, as females had to take permission from their male guardians for most of the social practices.
But women are entering the job market en masse in modern-day Saudi Arabia, not to mention that almost 30 % of buyers of Almajed’s houses are also females. One of the reasons for this changing outlook of Saudi’s economy is the rising energy prices worldwide, which has accumulated riches for the average Saudi citizen.
Reportedly, Saudi is now the fastest growing economy in G20 as the oil prices consistently remained over $100 a barrel this year.
In the second quarter of 2022, the overall GDP of the country rose by 11.8%, while the non-oil economy jumped by 5.4%. With this rise, the non-oil GDP of the country is now touching a historic high of pre-pandemic times.
Even though the fear of recession grapples the global economies, the capital investment in Saudi Arabia is also rising sharply.
From April to June, the overall capital spending increased to 64 % as the country invested top dollars in building new infrastructure, including parks, malls, and luxury tourism facilities.
Typically, Saudi elites fly to cooler places in Europe in summer, but this time the luxury resorts in the kingdom are packed. Some hotel bookings are even booked months before the events.
If Saudi Arabia continues to develop its fancy resorts, economic experts believe that it is only a matter of time that oil will no longer be the top priority of the kingdom.