AI Summary
The Saudi flag against Riyadh’s skyline
Saudi Arabia’s economy saw several significant developments in 2025, most notably a series of decisions affecting the real estate sector.
Crown Prince Mohammed bin Salman said the Saudi economy continued to diversify its growth drivers and strengthen its ability to reduce dependence on oil.
The year also witnessed major geopolitical developments with economic repercussions, most notably a trade war triggered by tariffs imposed by the United States on several countries, led by China and Europe.
During 2025, the US Federal Reserve cut interest rates three times, by a cumulative 75 basis points, at its September, November, and December meetings, bringing the target range to 3.50%–3.75%.
The Public Investment Fund (PIF) launched Al Waha Duty-Free Co., which specializes in duty-free retail, as well as a company to develop and operate Expo 2030 Riyadh facilities, and established its first commercial paper program.
Meanwhile, the Ministry of Industry and Mineral Resources launched standard incentives for the industrial sector, allocating SAR 10 billion for their implementation. The number of companies that established regional headquarters in the Kingdom rose to 682.
Below is a chronological overview of key developments:
1. Launch of standard incentives for the industrial sector
The Ministry of Industry and Mineral Resources, in cooperation with the Ministry of Investment, announced the launch of standard incentives for the industrial sector during a ceremony held in Riyadh, with SAR 10 billion allocated to the initiative.
2. Listed firms receive Aramco notices on feedstock and fuel prices
Several companies listed on the Saudi stock market said they had received notices from Saudi Aramco regarding adjustments to feedstock and fuel prices, effective Jan. 1, 2025.
3. Ministry launches 15 enablers under Saudi AEO program
The Ministry of Industry and Mineral Resources launched 15 enablers and incentives for entities enrolled in the Saudi Authorized Economic Operator (Saudi AEO) program, highlighting the program’s role in boosting the competitiveness of Saudi exports, improving access to global markets, and reinforcing the Kingdom’s position as a global logistics hub.
4. Saudi Electricity settles historical obligations worth SAR 5.7 billion
Saudi Electricity Co. said it had received approval from a ministerial committee overseeing electricity sector restructuring to adopt a final settlement of long-disputed amounts related to technical differences in fuel quantities and prices, handling costs, and electricity charges.
The committee approved a final settlement of SAR 5.69 billion, payable by the company to the government, represented by the Ministry of Finance. The amount will be converted into a Mudarabah instrument in line with an agreement signed between the company and the ministry, within 30 days from Jan. 31, 2025.
5. Launch of second and third phases of Riyadh Road Development Program
The Royal Commission for Riyadh City (RCRC) announced the start of the second phase of the Main and Ring Road Axes Development Program, comprising eight projects with a total cost exceeding SAR 8 billion.
In December, the commission also announced the launch of the third phase, which includes six projects with a combined cost exceeding SAR 8 billion.
6. Crown Prince names automotive manufacturing zone
Crown Prince Mohammed bin Salman announced that the designated automotive manufacturing zone within the Special Economic Zone at King Abdullah Economic City will be named the “King Salman Automotive Cluster.”
7. Launch of aircraft manufacturing and maintenance industrial zone
Saudi Arabia launched its first industrial zone dedicated to aircraft manufacturing and maintenance in Jeddah during the Aerospace Connect Forum held in the city.
8. Inauguration of first phase of Sports Boulevard
The board of the Sports Boulevard Foundation, chaired by Crown Prince and Prime Minister Mohammed bin Salman, inaugurated the first phase of the Sports Boulevard project, which includes five destinations.
9. Saudi Arabia submits Expo 2030 registration dossier
Saudi Arabia submitted the official registration dossier for Expo 2030 Riyadh to the Bureau International des Expositions (BIE), reaffirming its readiness to host the global event.
In June, the dossier received final approval during the BIE General Assembly meeting in Paris, completing the host country registration process. The Saudi delegation also received the Expo flag.
In October, Expo 2030 Riyadh officially received the BIE flag during the closing ceremony of Expo 2025 Osaka, which concluded after six months of events in Japan.
10. PIF launches Al Waha duty-free retailer
The Public Investment Fund announced the launch of Al Waha Duty-Free Co., which specializes in travel retail and will be the first Saudi-owned operator of duty-free retail outlets.
11. S&P raises Saudi Arabia’s credit rating
Standard & Poor’s upgraded Saudi Arabia’s sovereign credit rating to A+ from A, with a stable outlook.
12. Crown Prince launches Saudi Architecture Characters Map
Crown Prince Mohammed bin Salman launched the Saudi Architecture Characters Map, which features 19 architectural styles inspired by the Kingdom’s geographic and cultural characteristics. The initiative aims to celebrate architectural heritage, enhance quality of life, and modernize the urban landscape as part of Vision 2030.
13. Measures announced to restore balance in Riyadh’s real estate sector
Crown Prince Mohammed bin Salman, in his capacity as prime minister, directed the adoption of several measures based on studies conducted by the Royal Commission for Riyadh City and the Council of Economic and Development Affairs to address rising land and rental prices in Riyadh, with the aim of restoring balance to the real estate sector.
14. Approval of executive regulations of the Investment Law
Saudi Arabia’s minister of investment approved the executive regulations of the Investment Law to support its implementation and achieve its stated objectives.
15. Cabinet approves amendment to idle land fees regulation
The Saudi cabinet, chaired by Crown Prince Mohammed bin Salman, approved amendments to the idle land fees regulation.
The Ministry of Municipalities and Housing said it had adopted and implemented the executive regulations for the White Land Tax, setting the tax rate at up to 10% of land value in line with urban development priorities.
Minister of Municipal, Rural Affairs, and Housing Majed Al-Hogail also announced the geographic scope of the White Land fees in Riyadh, a step aimed at regulating the real estate market and promoting balanced urban development.
16. US tariffs take effect
In April 2025, US tariffs on a wide range of countries came into force, affecting around 60 US trading partners.
US President Donald Trump signed an executive order amending reciprocal tariffs imposed on dozens of countries, stipulating that goods deemed to have been rerouted to circumvent applicable tariffs would be subject to an additional 40% levy.
17. Energy Minister announces new oil and gas discoveries
Energy Minister Prince Abdulaziz bin Salman said Saudi Aramco had made 14 new discoveries of oil and natural gas fields and reservoirs in the Eastern Province and the Empty Quarter.
The discoveries include six oil fields and two oil reservoirs, as well as two gas fields and four gas reservoirs.
18. Cabinet approves amendments to housing subsidy regulations
The cabinet, chaired by Crown Prince Mohammed bin Salman, approved amendments to housing subsidy regulations, according to the decision.
19. Royal decree extends downstream tax to end-2030
Saudi Arabia’s King Salman bin Abdulaziz issued a royal decree approving the extension of the tax applied to the taxable base of taxpayers engaged in downstream activities until Dec. 31, 2030.
20. PIF launches company to build and operate Expo 2030 Riyadh facilities
The Public Investment Fund launched Expo 2030 Riyadh Co., which will be responsible for building and operating the exhibition’s facilities and investing in them over the long term.
21. PIF establishes first commercial paper program
The Public Investment Fund established its first commercial paper program, saying the move adds a new financing instrument to its existing funding tools.
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