Saudi Arabia’s Non-Oil Economy Surges, Defying IMF Projections
At the World Economic Forum in Davos, Saudi Arabia’s finance minister, Mohammed Al-Jadaan, addressed concerns about the International Monetary Fund’s recent revision of the Kingdom’s economic growth forecast. The IMF adjusted Saudi Arabia’s 2025 GDP growth projection to 3.3%, citing constraints from reduced oil production. However, Al-Jadaan emphasized that GDP alone doesn’t capture the full economic picture.
Saudi Arabia’s Vision 2030 initiative focuses on diversifying its economy, prioritizing non-oil GDP growth. Al-Jadaan highlighted robust non-oil GDP expansion and a significant increase in private sector investment, which rose from 16-17% of GDP to 24%. This shift, he noted, requires substantial structural changes.
Despite having excess oil production capacity, Saudi Arabia opted for strategic reductions to ensure sustainable growth. Al-Jadaan warned against relying solely on GDP as a growth measure, advocating for a broader view of economic indicators.
With historic low unemployment and a thriving private sector, Saudi Arabia continues to make difficult decisions for long-term prosperity. Al-Jadaan also pointed to artificial intelligence as a key factor in economic diversification, suggesting that the Kingdom could eventually export data instead of oil.
To support AI infrastructure, Saudi Arabia leverages its competitive advantages, such as producing low-cost solar power and implementing quick, supportive government policies. The Kingdom plans to treat data centers with embassy-level security and boasts a strong capability in government cybersecurity, managed entirely by Saudi talent.
Looking at the broader Middle East and North Africa region, Al-Jadaan expressed optimism despite challenges like high youth unemployment and geopolitical issues. He stressed the importance of focusing on human capital and regional reforms to unlock the region’s potential.
Al-Jadaan concluded by advocating for stability and governance reforms, emphasizing that with the right strategies, the region could achieve significant growth and transformation.