Saudi Arabia Macroeconomic Developments
- Saudi Arabia’s value-added tax (VAT) increase will be temporary and is expected to “last one to five years,” according to H.R.H. Crown Prince Mohammed bin Salman. The VAT, which was introduced at 5 percent in 2018 and then increased to 15 percent last July, would be lowered to the 5 to 10 percent range.
- New residential mortgages in Saudi Arabia rose 23 percent MoM in March, reaching a record high SAR16.9 billion ($4.5 billion). The number of signed contracts also rose 21 percent over the same period with an average size of SAR533,000 ($142,000). Compared to last year, Saudi mortgage issuances are up 56 percent in March. Read more about the Saudi housing sector in our January Economic Brief.
- Saudization in the private sector rose to 22.8 percent in Q1 2021 from 20.4 percent last year, according to Saudi Arabia’s National Labor Observatory. Sectors that achieved 50 percent Saudization or higher included ‘finance and insurance’ (84 percent), ‘public administration, defense, and social insurance’ (72 percent), ‘mining and quarrying’ (63 percent), ‘education’ (53 percent), and ‘information and communications’ (51 percent).