Saudi Arabia’s Transformation: A Non-Oil Economic Surge
Saudi Arabia, traditionally known for its pivotal role in the global oil market, has achieved a significant milestone in economic diversification. In 2023, the Kingdom’s non-oil revenues reached a historic high, accounting for half of its Gross Domestic Product (GDP). The non-oil sector’s robust performance, valued at 1.7 trillion Saudi Riyals (about 453 billion U.S. dollars), was powered by growth across various industries, including private sector investments, which soared by 57 percent to 959 billion Saudi Riyals (approximately 254 billion U.S. dollars).
As part of the Saudi Vision 2030, the country’s blueprint for reducing oil dependence, investments have poured into underdeveloped sectors, spurring growth. Notably, arts & entertainment and real service exports expanded by 106 percent and 319 percent, respectively, turning the Kingdom into a burgeoning hub for tourism and entertainment. Additionally, the food sector, transport and storage services, and health and education sectors witnessed significant growth, contributing to the overall economic upswing.
Renewable Energy and Non-Oil Sectors Fuel GCC’s Progress
Saudi Arabia’s ambitious goals include generating approximately 60 gigawatts (GW) of renewable energy by 2030, a stark increase from its current 2.8 GW capacity. The Kingdom is also investing heavily in the Jafurah gas field development and constructing a $5 billion green hydrogen plant to support the energy needs of the future city of Neom. The strategic shift towards renewable energy is complemented by the country’s first shipment of blue ammonia to Japan, highlighting its commitment to cleaner fuel alternatives.
The success of Saudi Arabia’s economic overhaul is reflected across the Gulf Cooperation Council (GCC) region. The World Bank’s Gulf Economic Update indicates that diversification efforts are effectively creating new employment opportunities and contributing to economic resilience, despite a downturn in oil production. The GCC’s GDP is projected to recover, with an expected growth of 3.6 and 3.7 percent in 2024 and 2025, respectively, driven by non-oil sectors.