Experts forecast that the economy of the Kingdom of Saudi Arabia will grow more significantly in the next years as the country looks towards economic diversification, self-sufficiency and sustainability in a bid to minimize the reliance on oil.
It is expected that most sectors will expand and witness more substantial growth in the future. The latest statistics suggest that the financial, insurance, real estate and service sectors will grow by 9% per year in the next years.
One of the many reasons for the growth is the national transformation program launched in 2016. The program concerns the development of the infrastructure in the country and an environment required to achieve the Saudi Vision 2030.
The Saudi Vision 2030 focuses on the aims and intentions of the Kingdom of Saudi Arabia to be achieved by 2030. It features eight key economic transformation targets translated into very specific objectives.
These elements include increasing the contribution of the private sector to gross domestic product (GDP), growing the government’s non-oil revenues and developing the country’s renewable energy capacity, expanding the local contribution to the oil and gas sector and raising the share of non-oil exports in the non-oil GDP. Further, the country is targeting an improvement of the position in global logistics, increasing travel and tourism including the capacity for pilgrimage and promoting household spending on entertainment activities.
The King Abdullah Petroleum Studies & Research Center (KAPSARC) published a paper titled “Economic Diversification Under Saudi Vision 2030: Sectoral Changes Aiming at Sustainable Growth” to mark the fifth anniversary of the launch of the vision. It focused on the macroeconomic and structural transformation of the Saudi Arabian economy.
The paper emphasized evidence that economic diversification would make the economy more resilient to external demand shocks, help to create higher-skilled jobs and establish a knowledge-based economy. It showed that the relative share of the wholesale and retail trade, restaurants and hotel or hospitality was expected to reach 16 percent of the gross domestic product (GDP) by 2030, followed by transport, storage and communication.
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