BrazilSubstantial progress booked at half-way mark of Vision 2030
In PwC’s latest report on Saudi Arabia’s progress towards Vision 2030, researchers look at where the Kingdom stands on key economic and non-economic objectives, as the country hits the half-way mark of its bold ambition. Faisal Alsarraj, deputy country senior partner at PwC in Saudi Arabia, reflects on the key findings.
Saudi Arabia’s Vision 2030 is based on three major pillars: ‘Ambitious Nation’, ‘Thriving Economy’, and ‘Vibrant Society’. These have shaped the national strategy and within each of these targets, substantial change and impact has been realised since the inception of the vision.
Reforms have helped reduce oil dependency, diversify income sources and enhance competitiveness on a global scale. Success to date has positioned Saudi Arabia as a global driver for innovation and created massive economic opportunities, while driving a sustainability agenda.
Highlights of progress booked
Ambitious Nation: Non-oil revenue grew from 163 billion to 411 billion, aiming for 1 trillion by 2030.
Thriving Economy: Saudi home ownership soared from 47 percent to 67 percent since 2022, closing in on the 2030 goal of 70 percent.
Vibrant Society: Female labor force participation is now at 36 percent in 2023 exceeding its 2030’s 30 percent target.
It has also been interesting to see the non-oil economy becoming a key driving force in KSA’s transformation journey. We as a nation have been able to bounce back from the pandemic and reimagine Saudi Arabia based on new initiatives and ideas that support the country as a whole.
The report identifies the following areas within the non-oil sector that have grown beyond the pre-pandemic days. These are trade and hospitality (up by 25 percent), manufacturing (up by 17 percent excluding oil refining), and finance and business services (up by 16 percent).
Notable areas of outstanding success include:
- Improvement in female labor force participation. Female economic empowerment has improved the earning potential of households.
- Increase in home ownership. This is likely to surpass targets by 2030 underpinned by the Vision’s objective. It states that “housing is the foundational asset that is capable of shaping and influencing the vibrancy of families, communities, and broader society.”
- Decline in unemployment. The inclusion of Saudi women into the labor force has resulted in a dip in unemployment. Unemployment hit 8 percent in Q4 2022, the lowest on record, down from the baseline of 11.6 percent. It is well on the way toward the 2030 target of 7 percent.
- Robust economic performance. Saudi Arabia has been the fastest-growing nation among G20 countries. It moved from the 19th to the 17th position.
- Largest Sovereign Wealth Fund in the world. The PIF is rapidly becoming one of the largest SWFs in the world, just shy of the top 5, based on the latest rankings.
- Increase in non-oil fiscal revenues. The Kingdom’s non-oil fiscal revenue, which is expected to remain above $1 trillion in 2023. The IMF predicted it will grow to $1.3 trillion by 2028.
What has to be done
To build on the Kingdom’s transformation, more needs to be done to boost performance on non-oil exports and the flow of foreign direct investment (FDI). Continued investments will support this to enhance and bring versatility to the economy.
It will take time for transformative investments to bear fruit, but the government is committed to strengthening new sectors such as tourism, hospitality, media and entertainment, mining and metals, digital and financial services and renewable energy. We are already seeing some transformative work happening in Neom, AlUla, Diriyah and the Red Sea project.
Taking a longer-term view, we are expecting to see the true impact of the Vision unfold well beyond 2030. The reforms and diversification have set the foundation for future development and investments that aim to transform the economy and shift away from oil dependency.
