The Saudi PIF has barred PwC from advisory work for one year without disclosing reasons. This move affects PwC’s significant operations in the region, where the firm has seen substantial revenue growth of 26%, totaling £1.97 billion ($2.5 billion). However, a slowdown in global consulting demand poses challenges for future revenue projections.
The Saudi Public Investment Fund (PIF) has blocked PricewaterhouseCoopers (PwC) from undertaking advisory work for a year without providing specific reasons in its communications to portfolio companies. PwC, which has over 2,000 employees in the kingdom and received a license to establish its regional headquarters two years prior, has not responded to inquiries regarding this decision.
PwC’s services include mergers, acquisitions, tax advisory, and strategy consulting, and its operations in the Middle East have been rapidly expanding. In the last fiscal year, the Middle East was PwC UK’s fastest-growing region, contributing significantly to its overall revenue.
For the year ending June 30, the Middle East accounted for £1.97 billion ($2.5 billion) in revenue, marking a 26% increase year-on-year. Despite this growth trajectory, PwC anticipates that revenue levels may not match the previous year’s standards going forward, citing a general slowdown in global consulting demand.
The PIF plays a pivotal role in Saudi Arabia’s Vision 2030 economic transformation, supporting approximately 100 portfolio companies, including Neom, a $1.5 trillion mega-project. This initiative, along with historic site developments, has bolstered the consulting sector, which is facing a downturn elsewhere, particularly in Australia and China.
Despite the downturn in global demand for consulting services, the Saudi wealth fund has fostered growth for firms like PwC. However, PwC and its peers have recognized slowing growth rates amid an evolving economic landscape.
PwC has been impeded from advisory work by the Saudi PIF for a duration of one year, affecting its extensive operations in the Middle East. Despite substantial revenue growth in the region, concerns about the overall global consulting demand are rising, especially given the PIF’s crucial support for projects under Vision 2030. The future revenue outlook may be less optimistic than previous years, highlighting the fragility of consulting growth in international markets.
Original Source: m.economictimes.com
