What's driving Saudi-Turkish momentum as trade set to pass $8B?
Introduction
The Saudi-Turkish economic momentum is being driven by several key factors as trade between the two nations is set to surpass $8 billion in 2024:
Strengthening Bilateral Relations
The growing economic ties between Saudi Arabia and Türkiye are largely attributed to the commitment of both countries’ leaders to improve relations. This political will has translated into increased cooperation across various sectors, including trade, construction, and investment.
Expanding Trade Volume
The trade volume between Saudi Arabia and Türkiye has been steadily increasing:
In 2023, it reached SAR 25.4 billion ($6.76 billion), marking a 15.5% growth.
As of September 2024, the trade volume had already reached $6.4 billion.
The goal for 2024 is to surpass $8 billion in mutual trade.
There are ambitious plans to reach $10 billion by 2025 and potentially $30 billion in the medium to long term.
Construction and Infrastructure Projects
Turkish contractors have been particularly successful in Saudi Arabia:
In 2023, Turkish companies won the most construction bids in Saudi Arabia, securing contracts worth $2.3 billion.
There are expectations to exceed $3 billion in construction contracts by the end of 2024.
Diversification of Cooperation
The momentum is further driven by collaboration in various sectors:
Agriculture and food
Tourism
Advanced manufacturing
Technology and innovation
Healthcare
Logistics
Investment Opportunities
Both countries are capitalizing on each other’s strengths and opportunities:
Saudi Arabia’s Vision 2030 reforms are providing significant opportunities for Turkish investors.
The number of Saudi companies in Türkiye has increased from 11 in 2011 to over 1,400 in 2023, with total investments reaching SAR 18 billion.
Approximately 390 Turkish companies are now investing in the Saudi market.
Strategic Initiatives
Several strategic moves are contributing to the momentum:
The establishment of the Saudi-Turkish Business Council has played a critical role in enhancing economic relations.
Free trade negotiations between Türkiye and the Gulf Cooperation Council (GCC), initiated in March 2024, are progressing.
The recent Saudi-Turkish Business Forum in Istanbul resulted in the signing of 10 cooperation agreements across various sectors.
Conclusion
This growing economic partnership between Saudi Arabia and Türkiye is expected to continue its upward trajectory, driven by mutual interests, complementary strengths, and a shared vision for increased cooperation across multiple sectors.
