Social and economic changes in Saudi Arabia have cast a shadow over society, as the kingdom is witnessing a prosperity that is not only related to oil, according to Bloomberg report.
In its report, the US agency highlighted the reforms introduced by Prince Mohammed bin Salman, since he assumed the mandate of the Crown Prince, years ago, which had a positive impact on life in Saudi Arabia.
She said that while Mohammed bin Salman has “centralized power and increases political repression,” he has ended or relaxed restrictions on leisure and mixing between men and women, and is trying to curb dependence on oil.
10 years ago, many property owners were not renting to women, who needed a guardian’s approval for many life decisions. Today, women are entering the labor market in greater numbers, and 30 percent of buyers in a luxury residential complex in Riyadh, for the developer. Abd al-Salam al-Majed, are female.
Bloomberg indicates that more than 300 apartments in the “Al-Majidiya Residence” complex were sold within just one month for cash, without the developer even having to announce it.
She said it was not surprising that the real estate market in Saudi Arabia, the world’s largest oil exporter, was overheated as income from rising energy prices flowed through the economy.
But Al-Majed says the scramble for homes, which cost regarding 1 million riyals ($266,400) per unit, reflects something else as well: the social and economic transformation reshaping the kingdom, which has been accelerated by the crown prince’s comprehensive reform program.
“There is a change in mentality,” Al-Majed added, with some Saudis adopting the more open lifestyle reflected in these units. The company caters to affluent professionals who want open-plan homes, with plenty of natural light.
In the past, many Saudis preferred homes with high walls and small windows to preserve privacy, but social openness with the emergence of small families changed this trend.
The report says that Saudi Arabia has benefited from the rising oil prices in order to advance the economy, noting that the average oil price, which has reached more than $100 per barrel this year, means that the Kingdom’s economy is the fastest growing in the Group of 20.
The GDP increased by 11.8 percent in the second quarter of this year, following the non-oil economy grew by 5.4 percent, and it is now greater than it was at the end of 2019, before the emergence of the Corona epidemic.
Aramco achieved the largest adjusted quarterly profit of any listed company globally.
Billions of dollars are pouring into Saudi coffers, and state investments have increased, which has boosted the positive sentiment of the private sector, which relies on government contracts.
Capital spending jumped 64 percent annually from April to June, as the kingdom embarks on building facilities including malls and parks as well as massive plans for a new city built from scratch on the Red Sea and tourism development plans.
In a sign of this social shift, Riyadh’s newest high-end restaurants are crowded in the summer, following Saudi elites preferred to travel to Europe.
Combined cash withdrawals and point-of-sale transactions, an indicator of consumer activity, which rose 9 percent annually in June, rebounded following a record high in March.
Inflation last month was just 2.7 percent, regarding a third of the rate in the United States and the eurozone.
Saudi Arabia is benefiting from oil money to stimulate sovereign funds and long-term projects such as the electric car industry and tourism.
The report says that the price of crude oil has now fallen to around $90 a barrel, with continued global fears of an economic slowdown, and the possibility of an increase in supply from Iran if the nuclear deal is revived.
“If there is another collapse in oil prices, there will be a slowdown once more in activity…but a number of positive factors are gathering at this point,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
