Saudi Arabia’s economy has increasingly garnered attention from across the globe as the Kingdom’s 2030 roadmap progresses to fruition. With the marking of the half-point of this transformative journey, its achievements so far have painted a story of groundbreaking advancement – a historical transformation that only comes around once in a lifetime.
The recently launched Saudi Vision 2030 progress report revealed that 87% of the planned initiatives are either completed or are on track, of which 360 are completed and 561 are on their way to completion – while this represents the growth of Saudi’s economy, it also showcases a wealth of untapped potential for innovative companies to expand and grab their chance to become an integral element of success in this journey.
Here’s a brief summary of the progress so far:
- 81% of Saudi Vision 2030’s key performance indicators have been met
- Non-oil activities contributed to 50% to the real GDP for the first time in 2023
- Private sector contribution to the GDP increased from 40% to 45%
- Tourism is the leading sector in Saudi – surpassed the initial target of 100 million visitors by 2030 by welcoming 106 million tourists in 2023.
Saudi’s economic journey so far
Ever since 2016, Saudi has undergone a series of remarkable shifts to diversify its economy and increase the contribution of its private sector. The strides of development made across Vision 2030’s three pillars – “a vibrant society”, “a thriving economy”, and “an ambitious nation” have resulted in 81% of its 243 key performance indicators being met, out of which 176 of them exceeded targets.
There are two pivotal agents of acceleration needed for any economy to develop and transform its sectors – the government and international & regional companies. The constant exchange between these two has led to the Kingdom’s non-oil activities contributing 50% to the real GDP for the first time, with the non-oil GDP growth reaching 4.7%, equating to $503 billion (SR1,889 billion). In context, the non-oil GDP growth stood at 0.5% in Q2 of 2016, when the Saudi Vision 2030 was launched. Governmental revenues from this sector reached SR457 billion ($128 billion), resulting in a jump of 175% from 2016.
Tourism was one of the leading sectors behind this push as its growth leaped across record-breaking numbers and welcomed 100+ million visitors in 2023. Tourist spending also spiked to its highest-ever value at $40 billion (SR 135 billion) last year, resulting in a 42% surge from 2022.
The Saudi government has been accelerating its support by rolling out initiatives for businesses to expand and grow. For example, the assets under its sovereign wealth fund, the Public Investment Fund (PIF) have increased from $557 billion in 2016 to $749 billion in 2023 – leading to the creation of a plethora of economic opportunities and generating 644,000 jobs last year.
At the same time, this has allowed companies across the world to mark their entry into the Kingdom. Evidently, 8,600 foreign investment licenses were issued in 2023, showcasing a 96% growth from the previous year. With a total of 23,800 foreign investment licenses issued so far, the private sector has experienced exponential development, highlighting its capacity for innovation.
Continued innovation and business expansion
While robust economic growth indicators provide a strong foundation for businesses to expand into the Kingdom, the government is consistently intensifying efforts to attract international businesses. By the nature of Saudi’s current mission, its committed focus on the private sector has resulted in innumerable benefits offered to businesses including 100% foreign ownership, 30 years of tax exemption for international businesses with RHQs, and low tax rates, among others. As a result, the private sector’s contribution has also increased to 45% in 2023 from 40% in 2016.
Evidently, building & transforming sectors has become a fundamental ingredient for fostering further economic prosperity. As the Gulf’s leading business expansion platform, we have identified and honed three fundamental pillars crucial for sectoral advancement in Saudi Arabia, closely aligned with its Vision 2030 goals – attracting global businesses that cater to the ever-evolving needs of the market, cultivating the local startups & SMEs to further drive economic growth across key sectors, and integrating corporates to enable cross-sector innovation in close alignment with the public sector.
We have bridged global markets to the Kingdom and accelerated the influx of international & regional businesses. The 600+ high-growth companies that we have expanded across pivotal sectors including Tourism, IT, and Construction, are at the forefront of making an impact and steering development across the nation. For example, one of our tourism leaders, ADB Safegate partnered with Riyadh Airports Company to build the IT and database infrastructure at King Khalid International Airport. They have also worked on the Red Sea Airport, highlighting the company’s impactful contribution to the construction upsurge in Saudi.
On the innovation front, nascent sectors in the Kingdom are rapidly developing. Gaming, for example, has experienced leaps of growth as it sets to contribute $13.3 billion to the nation’s economy by 2030. To support this drive, we partnered with Saudi’s MCIT in 2021, on their first-ever gaming-focused program, “Game Changers,” and launched 10 gaming studios, thereby increasing the number of operating gaming studios in the country back then by 100%.
The upcoming years hold an exciting journey for Saudi Arabia, as it sets to complete its 2030 goals and host some of the biggest mega-events such as Riyadh Expo 2030 & FIFA 2034. The companies that have already expanded and settled into Saudi’s economy have witnessed tremendous growth opportunities, pushing them to become a leader in the Kingdom by capitalizing on their first-mover advantage.
The progress has showcased the Kingdom’s relentless drive to innovate, transform, and expand its economy with Vision 2030 as a key magnet attracting businesses across the globe. Perhaps the most fascinating aspect of Saudi’s story so far is that its next leg of growth is only anticipated to have numbers skyrocket to 5x of what we are seeing right now – just this week, a Saudi official revealed that the Kingdom is open to scaling its target of 150 million tourists by 2030.
Become a part of Saudi’s 2030 growth roadmap. Expand to the Kingdom with AstroLabs