BrazilKSA’s economic diversification path going hand in hand with sustainability
Saudi Arabia is continuing to make progress on its economic diversification agenda, while at the same time booking positive momentum on its sustainable targets, according to PwC’s latest economic report for the kingdom.
The analysis by the firm’s economists found that Saudi Arabia managed to grow its non-oil economy by 3.8% year-on-year, fueled by a 4.9% expansion in the private sector in the second quarter – the strongest performance in a year. Driving this growth were the trade and hospitality sectors. Other key sectors, such as transport, communications, financial services, and business services also showed positive growth.
Known as Vision 2030, Saudi Arabia’s economic diversification strategy aims to reduce the kingdom’s reliance on oil by developing other sectors and encouraging investment in non-oil industries. Introduced in 2016, Vision 2030 sets a framework to transform the economy through three core objectives: a thriving economy, a vibrant society, and an ambitious nation.
Further reading: Substantial progress booked at half-way mark of Vision 2030.
Hand in hand with sustainability
As the kingdom pushes for these economic goals, policy makers are simultaneously working towards a green agenda, which sees to make businesses and industry more sustainable, roll out climate change initiatives, and promote the sustainability of ecology and natural capital.
PwC said in its report that Saudi Arabia’s sustainability journey has in recent times achieved significant milestones, including the development of non-associated gas, now accounting for half of the country’s total gas production. Plans to expand gas production, focusing on the Jafurah unconventional gas field (expected to begin in Q3 2025), are set to further boost the Kingdom’s energy transition.
Under the umbrella of the National Renewable Energy Program, which aims to generate 50% of electricity from renewables by 2030, Saudi Arabia is investing in renewable energy, particularly solar and wind. The goal is to add 20GW of renewable energy capacity annually to reach 130GW by 2030.
As of September 2024, 21 renewable energy projects had been contracted, with a total capacity of 19GW. The 700MW Al-Rass solar plant, which became operational in August, is part of this ambitious plan, with capacity expected to more than double in 2025 and again in 2026 to reach 21GW.
The Kingdom is also making significant investments in electric vehicle (EV) manufacturing, establishing a hub in King Abdullah Economic City with a target of producing 150,000 vehicles by 2026 and 500,000 by 2030. Additionally, the government is expanding EV infrastructure through the Electric Vehicle Infrastructure Company, a joint venture between Public Investment Fund and Saudi Electricity Company, which aims to install 5,000 fast chargers by 2030.
Commenting on the progress booked, Riyadh Al Najjar, Middle East Chairman and KSA Senior Partner of PwC said: “Saudi Arabia's transformational journey combines economic diversification with sustainable growth. The progress demonstrates Saudi Arabia’s capacity to create new opportunities and drive innovation – all while ensuring a sustainable future for generations to come.”
Faisal Alsarraj, KSA Deputy Country Senior Partner, added: “Saudi Arabia's drive towards a diversified and sustainable economy showcases its adaptability and resilience. These efforts reflect our nation's commitment to a greener future and set a benchmark for global energy transition.”
