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Saudi Arabia offers Pakistan share of USD 200 billion in annual construction contracts

During a protracted economic crisis that has damaged foreign exchange reserves and undermined the value of the national currency, Pakistan is looking to expand trade and investment ties with friendly countries

The Kingdom intends to give Pakistan a sizable share of its USD 200 billion yearly construction and material procurement contracts, according to a statement made by Saudi Arabia’s Investment Minister Khalid Al-Falih.

During his three-day visit, Al-Falih expressed optimism that he would conclude at least USD 2 billion in business proposals while speaking at a joint business forum in Islamabad.

Saudi Arabia is making significant investments to diversify its economy as it gets ready to overtake the United States as the largest construction market globally.

As per the 2024 report by Knight Frank, a global property consultancy, the construction output is expected to increase by nearly 30% from 2023 to USD 181.5 billion by the end of 2028.

“Saudi Arabia is the largest construction site in the world and we will in the next few years be awarding construction and material procurement contracts reaching about USD 1.8 trillion,” Al-Falih said at the Pak-Saudi Business Forum 2024, Arab News reported.

The minister said that in 2023, “the construction and EPC procurement value was USD 150 billion;” this year it’s estimated at USD 180 billion, and expected to rise to “approximately USD 200 billion annually moving forward.”

The majority of the inputs for these contracts, according to Al-Falih, will be imported, with Pakistan being the country of choice for sourcing.

During a protracted economic crisis that has damaged foreign exchange reserves and undermined the value of the national currency, Pakistan is looking to expand trade and investment ties with friendly countries. This is why the Saudi minister is visiting the country.

Crown Prince Mohamed bin Salman has reiterated his intention to expedite a USD 5 billion investment package for Pakistan in 2024, as part of an increase in bilateral trade and investment between Saudi Arabia and Pakistan in recent months.

The Pakistani President’s Office said that 25 agreements would be signed during Al-Falih’s visit, marking the beginning of a new phase of economic collaboration. The construction, infrastructure, mining, agriculture, and information technology sectors in Pakistan will be the main targets of these agreements.

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