The business sector in Saudi Arabia experienced significant growth across various segments in May, with banks providing loans, overdrafts, and lines of credit to support companies’ investment projects, capital goods purchases, and business expansion. Out of the 16 business segments classified by the National Classification of Economic Activities, 15 witnessed a year-on-year increase in bank credit, except for agriculture, forestry, and fishing, which declined by 8.06 percent.
Bank credit to professional, scientific, and technical activities in Saudi Arabia saw a notable increase of 49.49 percent, reaching SAR 5.01 billion ($1.34 billion) in May compared to SAR 3.35 billion in the same month the previous year, according to the latest data from the Saudi Central Bank (SAMA). The segment also recorded a 21 percent rise in bank credit compared to SAR 4.11 billion in April. This segment encompasses a wide range of professional services, including legal and accounting, architectural and engineering, technical testing and analysis, and research and development in scientific fields.
The Kingdom has witnessed significant growth in this segment, with collaboration between state-run institutions like the Research Development and Innovation Authority and the private sector to promote innovation and entrepreneurship. This sector is expected to play a crucial role in Saudi Arabia’s Vision 2030 diversification strategy, aimed at reducing reliance on oil revenues and developing a knowledge-based economy. German research platform Statista projects that this sector will reach $8.5 billion in 2024.
Another segment that attracted substantial bank credit was the electricity, gas, and water suppliers sector, which experienced a 34.79 percent increase in May compared to the same period last year, reaching SAR 124.49 billion. This segment includes activities related to generating, transmitting, and distributing electricity, gas, and steam, as well as water collection, treatment, and supply.
This growth in the electricity sector aligns with Saudi Vision 2030, which aims to replace a significant portion of petroleum used for electricity generation with a mix of natural gas and renewable energy. The Ministry of Energy’s investment in power and renewable energy projects is expected to reach $293 billion by 2030.