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The International Monetary Fund has raised its expectations for Saudi Arabia’s economic growth in 2025 to 6 percent, up from the 5.5 percent predicted earlier this year.
The World Bank has raised its expectations for Saudi Arabia’s economic growth to 5.9 percent in 2025, up from the 4.2 percent predicted earlier in January.
The National Competitiveness Center and the World Bank Group have announced their intention to establish a knowledge center in Saudi Arabia during an event in Washington. This move is part of both sides’ efforts to promote the culture of economic reforms globally.
Fitch Ratings has affirmed Saudi Arabia’s Long-Term Foreign-Currency Issuer Default Rating at ‘A+’ with a stable outlook.
These international praises for the performance of the Kingdom’s economy and the financial and economic reforms did not come out of nowhere or out of courtesy, but rather were based on actual performance embodied by the country’s Vision 2030 during the eight years since its launch on April 25, 2016.
Over the past eight years, the Kingdom’s Vision 2030 has successfully reshaped the Saudi economy by establishing a robust foundation for economic prosperity.
In addition to prioritizing the development of the national economy, the vision has also succeeded in creating sustainable living standards and implementing efficient health and social care systems.
The Kingdom’s economic reforms have succeeded to raise the contribution of the non-oil real gross domestic product to 50 percent of the total GDP for the first time in its history. Additionally, in 2022, the GDP experienced a remarkable growth of 8.7 percent compared to 2021, marking the highest growth rate among all G20 member states.
Such remarkable economic achievements have resulted in establishing an environment that supports job creation for all Saudis by leveraging several reforms in the local labor market to attract top Saudi talent.
The number of Saudi workers hit an all-time high of 2.2 million in 2022, and the unemployment rate for Saudis dropped to a record level of 7.7 percent in the fourth quarter of 2023, compared to 8.6 percent in the third quarter of 2023.
Additionally, the unemployment rate for Saudi females during the last three months of 2023 has decreased to 13.7 percent compared to 16.3 percent in the previous quarter, while the unemployment rate for Saudi males remained stable at 4.6 percent in the fourth quarter of 2023.
Saudi females’ participation in the local labor market reached 35.5 percent in the fourth quarter of 2023, surpassing the target set in Vision 2030 of 30 percent.
Despite the decline in the global FDI net inflow by 12 percent in 2022, reaching $1.29 trillion according to UNCTAD data, the foreign direct investment net inflow into Saudi Arabia witnessed a growth of 21 percent annually, reaching SR105 billion ($28 billion) in the same year.
Over the past eight years, the Kingdom’s Vision 2030 has successfully reshaped the Saudi economy by establishing a robust foundation for economic prosperity.
Talat Zaki Hafiz
Saudi Arabia ranked 10th in terms of FDI net inflows and 16th in terms of FDI stock among the G20 countries in 2022.
It’s worth mentioning that the FDI inflow as a percentage of FDI stock rose from 5.6 percent in 2017 to 16.1 percent in 2022. Conversely, FDI outflow as a percentage of FDI stock fell from 4.8 percent to 2.3 percent for the same period.
On the housing front, before the launch of the Kingdom’s Vision 2030, Saudi families used to wait up to 15 years to receive housing support. Today, that support is becoming instant through easing access to financial support, streamlining processes, and digitizing documentation. As a result, homeownership has increased from 47 percent to more than 60 percent in 2022.
Saudi Arabia has made unprecedented strides in its tourism sector, achieving a remarkable milestone with total spending by inbound visitors reaching SR135 billion in 2023. This marks the Kingdom’s highest-ever spending by inbound visitors, with a growth of 42.8 percent compared to inbound visitor spending in 2022.
Furthermore, Saudi Arabia has garnered widespread international recognition from the UN Tourism and the World Travel and Tourism Council for surpassing 100 million inbound and domestic tourists in 2023. Both organizations have praised the significant efforts undertaken in the Kingdom’s tourism sector.
As a reliable and responsible energy provider to the world, the Kingdom has entered a new green era by investing heavily in renewable energy solutions such as wind and solar. These programs will promote clean energy and a low-carbon future, supporting Saudi Arabia’s goal of achieving net-zero emissions by 2060.
Saudi Arabia has made remarkable improvements to industry regulations and legislation, positioning the Kingdom as a leading nation in heavy industries and mining.
Finally, the Public Investment Fund, established in 1971 and “reborn” in March 2015, has positioned itself as a key driver for Vision 2030 by achieving positive, sustainable economic and social change.
PIF’s assets under management have grown from SR971 billion in 2018 to SR3.5 trillion, with over 644,000 direct and indirect jobs created through 94 companies investing in 13 strategic sectors.
I believe that Saudi Arabia is a unique country in the way it has managed its ambitious vision through dedication and fulfillment of its duty toward promoting its rich national identity. This commitment aims to achieve the highest degree of happiness for all citizens and residents by prioritizing physical, psychological, and social well-being.
• Talat Zaki Hafiz is an economist and financial analyst. Twitter: @TalatHafiz.