ECONOMY

SAUDI’S NON-OIL ECONOMY CONTINUES TO ATTRACT INVESTORS

Saudi Arabia’s economy expanded by 1.3% in 2024, driven by robust non-oil sector and government activities, according to data from the General Authority for Statistics (GASTAT). While non-oil GDP grew by 4.3% and government activities rose by 2.6%, oil sector output contracted by 4.5%, reflecting ongoing production cuts and global market dynamics.

Quarterly data showed a stronger-than-expected rebound, with GDP posting a year-on-year (yoy) growth of 4.5% in Q4 2024, led by a 4.7% expansion in the non-oil sector and a 3.4% increase in oil-related activity. Seasonally adjusted GDP accelerated 0.5% from the previous quarter, underscoring the resilience of Saudi Arabia’s economic diversification eorts under Vision 2030. 

The expansion is part of a massive economic build-up as the government invests billions in developing new industries to lure private and international businesses to its shores.

And global players are paying heed. The number of international companies establishing their regional headquarters in the kingdom has now risen to nearly 600. That is according to the Minister of Investment Eng. Khalid Al-Falih, who noted that the number of registered investment licenses surged from 4,000 in 2018 and 2019 to 40,000 currently, while total investments have doubled to SAR 1.2 trillion, accounting for 30% of the country’s economy. 

INVESTOR CONFIDENCE

Overall, the Saudi economy has surpassed SAR 4 trillion (approximately USD 1.1 trillion), achieving unprecedented growth in foreign investment inflows. Since the launch of Saudi Vision 2030, the total foreign investment stock has doubled to SAR 900 billion, reaffrming the kingdom’s accelerated progress toward its investment and economic goals.

"Seventy-two per cent of investments came from the private sector, while the Public Investment Fund's (PIF) portfolio and companies account for only 13%,” Al-Falih said at the PIF forum. “This underscores Saudi Arabia's position as a strong global investment destination, thanks to its attractive economic environment and diverse investment opportunities across various sectors.”

Economic reforms under Saudi Vision 2030 have enhanced the competitiveness of the local market and attracted major international companies, with the rapid growth in foreign direct investment flows reflecting investor confidence in Saudi Arabia’s economy and stability.

Notable diversification of Saudi Arabia’s economy means that non-oil economic activities now account for 52% of total GDP. As such, even during periods of reduced oil activity due to the kingdom’s production policies, the non-oil sector maintained a positive growth rate of 4% to 5%. 

EXPORTS SURGE

The country’s non-oil exports surged 18.1% in December 2024 compared to a year earlier, while re-exports climbed 23.4%. However, overall merchandise exports declined 2.8%, reflecting a 13.3% drop in oil exports. The share of oil in total exports fell from 76.4% in Q4 2023 to 70.5% in Q4 2024, indicating a continued shift toward non-oil trade. Meanwhile, imports jumped 27.1% in December, widening the trade balance deficit. 

The trend was mirrored in quarterly figures, with non-oil exports (including re-exports) rising 17.3% yoy in Q4. National non-oil exports, excluding re-exports, increased 8.2%, while re-exports surged 47.3%. Imports for the quarter climbed 15.5%, contributing to a 52.4% decline in the trade surplus. 

Inflation remains contained, with consumer prices rising 2.0% yoy in  January 2025, the lowest among G20 economies, according to GASTAT’s Consumer Price Index (CPI) report. The index tracks 490 goods and services, based on 2018 household expenditure patterns.

SAR 1 TRILLION GOAL

Looking ahead, Minister of Economy and Planning Faisal Alibrahim forecasted strong non-oil sector growth through 2026, supported by large-scale infrastructure projects and targeted investments. Speaking at a recent PIF Private Sector Forum, he emphasised the sovereign wealth fund’s role in fostering economic expansion, establishing strategic enterprises, and catalysing new industries.

With infrastructure investments expected to reach USD 1 trillion by the end of the decade, the government’s commitment to public-private partnerships and sustainable economic expansion remains central to the nation’s long-term strategy. 

Alibrahim reiterated that PIF’s mission extends beyond financial gains, highlighting its part in advancing Saudi Arabia’s knowledge economy and human capital development. He described the country’s economic transformation as a fundamental shift rather than a transitional phase, with diversification and high-value exports as core pillars of Vision 2030.