Saudi Arabia’s economy and future are going through an important transition that might change everything. The royal family has been highly dependent on its oil wealth for decades, but it is currently working towards a significant transition. Crown Prince Mohammed Bin Salman is leading Vision 2030 and aims to restore its economy and ensure its global power.
Everything about the Saudi Arabia’s Investments
Economic Resurgence
Saudi Arabia’s economy is on an upswing. Despite the pandemic’s impact in 2020, its GDP exceeded $1 trillion in 2021 for the first time. The per capita output reached $30,436, marking a 50% increase in just two years. Higher global energy prices and a robust 4.8% non-oil GDP growth fueled this growth, with the construction and transport sectors booming.
Reducing Oil Dependency
Oil is the primary source of revenue in Saudi Arabia despite efforts to diversify. The kingdom’s economic expansion of 8.7% in 2021 was primarily driven by higher oil prices. An oil company known as Saudi Aramco announced record earnings of $161 billion in 2021, highlighting the importance of oil revenues.
Strategic Investments
Saudi Arabia has been flexing its financial muscles both domestically and internationally. The Public Investment Fund (PIF), the nation’s powerful sovereign wealth fund led by Crown Prince Mohammed Bin Salman, is behind significant investments. These include acquisitions in sports like Newcastle United and the LIV Golf merger with the PGA Tour, as well as domestic projects like NEOM and the Red Sea resort.
Youthful Population
With a median age of 29 and over half the population under 30, Saudi Arabia’s youth pose both opportunities and challenges. Creating employment and diversifying the economy are priorities to harness this demographic dividend.
Hub for Foreign Nationals
Saudi Arabia has a significant foreign workforce, making up over 40% of its population. Migrant laborers play crucial roles in sectors like agriculture and domestic services. However, there is a significant need for labor reform.
Regional Economic Powerhouse
In the Gulf States, Saudi Arabia is a key player. It registered the highest GDP in the Arab League, and its $1 trillion economy outpaces its neighbors. Despite its impressive GDP, per capita figures lag behind Qatar, the UAE, and Kuwait.
Diverse Future
The economic diversification plans include a number of industries such as tourism, entertainment, sports, technology, and renewable energy. These initiatives are designed to develop a strong and sustainable economy independent of oil.
