Saudi Arabia’s economy has undergone nearly a decade of transformation under Crown Prince Mohammed bin Salman, as sweeping reforms and diversification efforts reshape the country’s economic landscape.
Since the launch of Saudi Vision 2030 in April 2016, the Kingdom has embarked on its most significant economic shift in decades. The transformation has extended far beyond fiscal adjustments or limited diversification programs, evolving instead into a broad structural reform aimed at reducing reliance on oil and building a more diverse and dynamic economy.
Economic indicators suggest the strategy is gaining traction. Saudi Arabia’s gross domestic product (GDP) rose from about SAR 2.6 trillion in 2016 to nearly SAR 4.7 trillion in recent years, roughly $1.3 trillion, according to the latest official figures. That represents an average cumulative annual growth rate of about 8 percent, placing the Kingdom among the fastest-growing major economies globally during this period.
The shift reflects Vision 2030’s broader strategy to expand non-oil industries and widen the country’s production base beyond hydrocarbons.
Faisal Al-Fadhel, a legal expert in economic legislation and a member of the board of trustees of the Riyadh Economic Forum, said the reforms launched under Crown Prince Mohammed bin Salman have introduced a more diversified and sustainable economic model.
“Saudi Arabia has moved toward reducing its dependence on oil while expanding promising sectors such as tourism, technology, logistics and advanced industries,” Al-Fadhel told Asharq Al-Awsat. “This approach enhances the resilience of the national economy and increases the attractiveness of the Saudi market for both domestic and foreign investors.”
Recent economic indicators support that assessment. Non-oil activities have recorded strong growth, the private sector’s contribution to GDP has expanded, and foreign direct investment inflows have increased. At the same time, Saudi Arabia has improved its standing in global competitiveness indicators, reinforcing its ambitions to become a regional hub for business and investment.
Al-Fadhel noted that the transformation has also been supported by a broad legislative reform agenda designed to modernize the regulatory environment. Key economic and commercial laws — including the Companies Law, Investment Law, and Bankruptcy Law — have been updated, alongside regulations related to corporate governance, investor protection and competition. The reforms aim to improve transparency, regulatory certainty and the efficiency of the investment environment.
Non-Oil Sectors Lead Growth
One of the most visible outcomes of the economic shift is the rising contribution of non-oil sectors, which now account for 56 percent of GDP. Data show that non-oil activities were the primary driver of real economic growth in 2025.
Saudi Arabia ended 2025 with its strongest growth in two years, with GDP expanding 4.5 percent, according to estimates by the General Authority for Statistics (GASTAT). The economy grew 5 percent in the fourth quarter, with all major sectors contributing to the expansion compared with 2024.
Labor Market Changes
The Saudi labor market has also seen notable shifts. Unemployment among Saudi nationals has declined, while female participation in the workforce has reached record levels following a series of labor and regulatory reforms.
More than 2.48 million Saudis have joined the private sector in recent years, reflecting the impact of job localization policies. Economic transformation programs have also generated roughly 800,000 new jobs, with strong growth in engineering professions.
Employment opportunities have expanded particularly in tourism, supported by major entertainment and tourism projects, as well as in the pharmaceutical and medical manufacturing industries, where job numbers have doubled.
Investment at the Center
Investment has become a central pillar of the Kingdom’s economic strategy. Crown Prince Mohammed bin Salman has positioned both domestic and foreign investment as key drivers of growth and diversification.
The government established the Ministry of Investment and launched the National Investment Strategy as a comprehensive framework to boost capital formation. Total investment — measured by fixed capital formation — has risen from about SAR 672 billion in 2017 to roughly SAR 1.44 trillion by the end of 2024, more than doubling in less than a decade.
Al-Fadhel emphasized that the private sector is a critical partner in achieving Vision 2030 goals through expanded investment, technological adoption, innovation, and entrepreneurship.
Public Investment Fund Expands Role
The Public Investment Fund (PIF) has emerged as a central instrument of the transformation. With assets estimated at SAR 3.47 trillion, it has become one of the world’s largest sovereign wealth funds.
PIF is leading major investments in tourism, renewable energy, industry, technology and entertainment while launching large-scale development projects designed to create new industries and strengthen Saudi Arabia’s position as a global economic hub.
