Businesses in Saudi Arabia are significantly more optimistic about revenue growth and business opportunities than last year, as the Vision 2030 reforms set by Crown Prince Mohammed Bin Salman look to increase private sector participation.
The company said its growth barometer showed 33 per cent of middle-market businesses in the kingdom anticipate growing more than 10 per cent this year and 60 per cent anticipate 6-10 per cent growth – up 24 percentage points on 2017.
“The ambitious growth expectations of Saudi middle market companies cited in the EY Growth Barometer far outstrip the International Monetary Fund’s 2018 GDP growth forecast of 1.7 per cent,” said EY Saudi Arabia managing partner Fahad Altoaimi.
“This is very encouraging for Saudi businesses – one of the key goals of Vision 2030 was to increase participation from middle-market businesses in the economy, and this has clearly boosted confidence.”
This optimism was also seen in hiring with 58 per cent of business leaders looking to recruit more full-time staff.
Nearly three quarters (73 per cent) of respondents said they were considering an IPO, 29 per cent said overseas expansion was a growth priority and 18 per cent said domestic growth.
Executives said cash flow was their number one challenge for growth, with 34 per cent relying on bank financing. However, there was optimism regarding government regulation, with 35 per cent citing it as the top driver of innovation compared to 7 per cent last year.
The wider study involved 2,766 C-suite executives in 21 countries, although the number of Saudi respondents was not stated.
More broadly, Saudi businesses have tackled higher costs this year linked to new fees for foreign staff, higher rates for fuel and electricity and a 5 per cent value added tax.
Unemployment among Saudi nationals rose to 12.9 per cent in the first quarter and 234,000 foreign workers left their jobs.
Source Credit: Gulf Business