ECONOMY

DIVERSIFICATION STRATEGY LIFTS SAUDI’S GROWTH OUTLOOK

The non-oil sector contributed a record 54.8% to the Saudi economy in 2024 – its highest contribution ever, in a sign that the authorities’ diversification drive is paying off.

Faisal Alibrahim, minister of economy and planning, noted that the kingdom is undergoing a historic economic transformation driven by Vision 2030, with non-oil activities leading the way. 

Meanwhile, a new progress report on Vision 2030 shows 93% of the goals and national strategy key performance indicators (KPIs) were on track in 2024. Around 374 indicators were active, with 299 already achieved including 257 that have surpassed targets. Around 49% of the indicators had reached between 85% and 99% of their targets.

Some key achievements in the economic sphere include attracting 1,865 investment opportunities, exceeding the 2024 target of 1,197. The Public Investment Fund (PIF) also increased its assets under management to USD 941.33 billion, beating the 2024 target of USD 880 billion.

“Non-oil GDP has steadily increased since 2016, with a compounded annual growth rate (CAGR) of 3.01%,” according to the report. “Despite falling slightly short of its 2024 target, the index reached 98% of the goal, supported by a 3.9% year-on-year growth rate. Growth was especially strong in wholesale and retail, hospitality, transportation, logistics, and technology, reflecting the kingdom’s efforts to diversify the economy and strengthen non-oil sectors.” 

EMPOWERING PRIVATE SECTOR

Last year, the private sector also contributed 47% to the economy, exceeding the annual target and reflecting a CAGR of 1.94% since 2016.

Key drivers of this growth included a shift away from oil dependency, expanded investment opportunities for the private sector, several PIF-led initiatives to boost private sector involvement. Saudi Arabia also continues to intensify efforts to empower the private sector, create a business-friendly environment, and enhance the role of small and medium enterprises (SMEs) through regulatory changes, giga-projects, and national strategies, including in sectors like industrial, transport, and logistics. 

Other key achievements in society included recording a historic number of foreign Umrah pilgrims, exceeding the 2024 target; raising Saudi homeownership to 65.4%, exceeding the 64% target set for 2024; and increasing the number of Saudi sites registered on the UNESCO World Heritage List, six years ahead of schedule

TECH FOR GROWTH

Digital economy is also emerging as a major driver of economic growth. The kingdom’s digital transformation is redefining the region’s technological landscape and positioning Saudi as a formidable force in the global digital economy. 

According to the latest Vision 2030 progress report, Saudi Arabia’s digital economy now contributes an estimated SAR 495 billion to the national GDP, accounting for nearly 15% of economic output. This figure underscores the rapid acceleration of the sector and its pivotal role in diversifying country’s economy beyond hydrocarbons.

At the heart of this momentum is the dynamic growth of the ICT market, which exceeded SAR 180 billion in 2024, cementing Saudi Arabia’s status as the largest technology market in the Middle East. The rise has been fuelled by bold private sector investments, the proliferation of start-ups, and a culture of innovation increasingly embedded across industries.

One of the most visible indicators of this growth is the surge in data  centre capacity, which rose by 42% in 2023 alone to reach 290.5 megawatts (MW). This dramatic expansion strengthens the kingdom’s readiness to meet soaring demand for cloud services, artificial intelligence (AI) applications, and high-speed digital services. Supporting this are major upgrades to the national digital backbone: over 3.9 million homes are now connected to fibre-optic networks, and Internet penetration has climbed to nearly 99%, ranking Saudi among the most connected countries in the world. 

The digital transformation is also reshaping the labour market. Saudi Arabia now boasts the largest digital talent cluster in the region, having created more than 381,000 quality technology jobs. Notably, women’s participation in the tech sector has surged from 7% in 2017 to an impressive 35% – the highest rate in the MENA region and well above averages for both the G20 and the European Union. This milestone reflects both the kingdom’s inclusive approach to development and its strategic investment in human capital. 

E-GOVERNMENT

In parallel, Saudi Arabia has emerged as a global leader in digital government. Ranked 6th globally in the United Nations’ E-Government Development Index – just one spot away from its Vision 2030 target – the kingdom is increasingly recognised for its streamlined, transparent, and user-centric public services. It also placed 4th in the global Digital Services Index, 2nd among G20 nations, and 1st in the region.

Further affrming its leadership, Saudi Arabia now ranks 1st globally in digital skills and open digital government, and 7th in the E-Participation Index, reflecting progress in citizen engagement and digital transparency.