- Saudi Arabia has played a significant role in the Gulf Cooperation Council’s efforts to diversify its economy.
- International Monetary Fund predicts a slowing of global economic growth, from 2021 to 2023.
- Oil continues to be Saudi Arabia’s principal source of export and fiscal revenue.
As part of the Gulf Cooperation Council’s efforts to diversify its economy, Saudi Arabia has played a significant role.
Despite worries about inflation and geopolitical threats, the country’s economic diversification has generated a rise in commercial activity.
Economic diversification
The World Economic Outlook report from the International Monetary Fund predicts a slowing of global economic growth, from 3.4% in 2021 to 2.8% in 2023, with an increase of 3.3% projected in 2019.
But from 2000 to 2019, Saudi Arabia’s Economic Diversification Index ratings significantly improved, with GCC countries placing among the top 20 nations that improved their EDI rankings during this time. Saudi Arabia’s non-oil gross domestic product, which is primarily driven by strong private consumption and non-oil private investment, reached 4.8% of GDP in 2022.
The IMF also draws attention to the rise in Saudi Arabia’s non-oil GDP, which grew significantly and reached 4.8% of GDP in 2022 as a result of strong private consumption and non-oil private investment.
The Kingdom’s success can be ascribed to its unwavering political commitment and the speedy implementation of Vision 2030 programs.
The government has been undertaking economic and social reforms since the publication of Vision 2030 in 2016, including removing barriers to women’s employment, creating new economic sectors, and cutting back on energy subsidies.
Saudi Arabia anticipates becoming a regional economic and technological center with an expanding presence in international markets as it moves closer to the implementation of its Vision 2030.
Nevertheless, oil continues to be Saudi Arabia’s principal source of export and fiscal revenue, accounting for more than 40% of its GDP. Saudi investments in industries including mining, metallurgy, hospitality, and tourism are anticipated to prosper to continue the country’s successful trajectory.
