Saudi Arabia Continues to Diversify its Economy

Abdullah Al Alami*

May 10, 2023

The US Federal Reserve and the European Central Bank announcements of interest rate hike, confirms that the inflation will remain high for a long time. The repetition of this scenario several times recently leads the way to tightening monetary measures throughout the world.

As for Saudi Arabia, it continues to diversify its economy, taking several factors into consideration. I specifically mean the growth of investment in new areas including non-oil sectors, the launch of huge infrastructure, introducing new tourism projects, and utilizing advanced technology in financial services.

Let me provide a couple of examples. Small and Medium Enterprises General Authority (Monsha'at) announced 23 new initiatives as part of the 7 strategic programs. These initiatives include national transformation, financial sector sustainability, with concentration on human resources development.

This is not all, Riyadh announced its desire to retreat from dependence on oil. This is an important and positive path, as 90% of the state's revenues used to be generated from oil, but have recently dropped to 60%. In addition, the Saudi Gross Domestic Product (GDP) achieved the highest growth rate among the G20 countries, at 9.9% in 2022, and is expected to be the same in 2023.

Among other positive developments, the International Monetary Fund expected Saudi non-oil GDP growth to reach 4.9% in 2023 and 4.2% next year. This is a result of applying financial and economic policies and managing investment projects in a professional manner.

Saudi Arabia continues to implement its development projects in cooperation with international companies. I am specifically talking about 108 regional companies that have moved their headquarters to Riyadh during the past two years, including 26 American companies. This is a result of new promising opportunities and profitable partnership with the Saudi institutions.

 

*Saudi writer