New Syria Defines Its Economic Identity: ‘Partnership’ Replaces Privatization in Recovery Plan

28 May 2026, Syria, Jobar: Syrians play in an Eid al-Adha amusement park in a devastated area amid the completely destroyed Jobar neighborhood on the outskirts of Damascus during the second day of the Muslim Feast of Sacrifice, Eid al-Adha. Photo: Moawia Atrash/dpa
28 May 2026, Syria, Jobar: Syrians play in an Eid al-Adha amusement park in a devastated area amid the completely destroyed Jobar neighborhood on the outskirts of Damascus during the second day of the Muslim Feast of Sacrifice, Eid al-Adha. Photo: Moawia Atrash/dpa
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New Syria Defines Its Economic Identity: ‘Partnership’ Replaces Privatization in Recovery Plan

28 May 2026, Syria, Jobar: Syrians play in an Eid al-Adha amusement park in a devastated area amid the completely destroyed Jobar neighborhood on the outskirts of Damascus during the second day of the Muslim Feast of Sacrifice, Eid al-Adha. Photo: Moawia Atrash/dpa
28 May 2026, Syria, Jobar: Syrians play in an Eid al-Adha amusement park in a devastated area amid the completely destroyed Jobar neighborhood on the outskirts of Damascus during the second day of the Muslim Feast of Sacrifice, Eid al-Adha. Photo: Moawia Atrash/dpa

Syria has settled the debate over the identity of its new financial and investment system, adopting a model of “strategic partnership” between the public and private sectors as a fundamental alternative to outright privatization. The shift officially elevates the private sector from a marginal supporting role to the “engine of economic development” and the principal partner in leading the recovery and reconstruction phase.

The strategic approach, crowned by the launch of a broad national dialogue in 2026, aims not only to attract domestic and expatriate capital and reconnect local value chains, but also to redefine the state’s role as a regulator and guarantor of a free market. Supported by an international vision focused on sustainability and an unprecedented package of legislative incentives, the strategy seeks to bridge a trust deficit that has persisted for years and build an open social market economy that balances freedom of individual initiative with broader developmental responsibility.

First dialogue after the political transition

Damascus recently concluded the First National Conference for Private Sector Dialogue in Syria 2026, held over three days at the Conference Palace.

The event was the first of its kind in the country since the beginning of the political and economic transition following the fall of the former regime at the end of 2024.

Organized by the Ministry of Economy and Industry in cooperation with the United Nations Development Programme (UNDP), with funding and support from the Japanese government, the conference drew nearly 500 economic figures, including ministers, representatives of public institutions, chambers of commerce, industry and agriculture, business councils, experts and businesspeople from inside and outside Syria, as well as international organizations.

According to official Ministry of Economy and Industry materials, the conference aimed to formulate practical visions and recommendations to support the path toward recovery and comprehensive development.

Syria’s new economic vision aligns with UNDP principles that view “economic diversification as a strategic asset.” Under this framework, the Syrian private sector is not regarded as a monolithic bloc but rather as a diverse and resilient ecosystem. Its structure spans several levels, most notably micro, small and medium-sized enterprises, which account for more than 90 percent of Syria’s business landscape and represent the country’s primary reservoir for absorbing the national workforce. It also includes family businesses and craft workshops that preserved productive skills locally throughout years of crisis under severe pressure, as well as agricultural producers and local manufacturers who ensured the continued minimum flow of goods into domestic markets.

Syrian workers load sacks of freekeh, a roasted green wheat grain widely used in Levantine cuisine, after burning and roasting immature wheat over open flames to separate and preserve the grains, on the outskirts of Taftanaz, northwestern Syria, Sunday, May 24, 2026. (AP Photo/Ghaith Alsayed)

Identity of the new economy

In comments to Asharq Al-Awsat, Osama Kadi, an economic expert and senior adviser for local economic policy affairs at Syria’s Ministry of Economy and Industry, said the conference had “removed ambiguity” regarding the identity of the Syrian economy in the coming phase.

He explained that the country’s economic direction is closest to a guided market economy, or social market economy, similar to those found in Germany, much of Europe and Canada. The private sector, he said, is viewed as the driver of economic development, while the public sector is not destined for privatization, with the government instead pursuing a partnership model with private enterprise.

Kadi added that the economic identity of the new Syria is based on free supply-and-demand mechanisms without monopolistic practices, while emphasizing good governance and the state’s role in monitoring the implementation of laws, ensuring their flexibility and fostering an attractive investment environment through tax rates designed to encourage economic activity.

Investment Law No. 114

Under Investment Law No. 114 of 2025, the Syrian government exempted all agricultural and educational activities from taxation and introduced incentives for industrial production.

Any investment company that exports more than 50 percent of its production receives an 80 percent tax exemption, while the general tax rate does not exceed 15 percent. Production lines and machinery used in manufacturing operations are also exempt from taxes.

Kadi noted that the law’s executive regulations support micro, small and medium-sized enterprises, which make up more than 90 percent of Syria’s businesses, through credit lines, concessional loans, business incubators and accelerators. The regulations also encourage such enterprises to participate in local and international exhibitions through business councils announced during the conference in more than 17 countries.

Mohammad Nidal al-Shaar speaks during the opening of the First National Conference for Private Sector Dialogue in Syria (X).

Balancing private initiative and the role of the state

Speaking at the conference’s opening session, Minister of Economy and Industry Mohammed Nidal al-Shaar said Syria is moving toward building a new economic model that combines realism, ambition and openness.

He said the country is closely examining states that have achieved successful models and rapid development over relatively short periods in order to learn from and adapt those experiences while building its own model based on its capabilities, strategic location and the expertise of Syrians at home and abroad.

Al-Shaar said that “adopting a free-market approach does not mean the absence of the state or the abandonment of market controls. Successful experiences have proven to be based on a balanced model between freedom of initiative and the strategic role of the state.”

He added that “modern economic revival is not built on slogans, but on efficiency, discipline, stability and genuine partnerships, as well as an economy that provides opportunities for initiative, creativity and production within a clear national vision.”

He stressed that the state’s economic role should not be reduced to a debate between public ownership and privatization, nor should privatization be viewed as a stigma, a default option or an automatic solution to economic challenges. The real value of public assets, he said, lies not in their sale price but in their ability to generate sustainable added value for the national economy.

Sectors for strategic partnership

Speaking to Asharq Al-Awsat, Kadi identified agriculture, agro-industry, energy, transport, infrastructure and reconstruction as the key sectors expected to lead public-private cooperation.

He said Syria remains an underdeveloped opportunity, with no more than 5 percent of its human potential, resources and underground wealth having been utilized. He also said Syria's geopolitical position had long been underutilized despite its potential and now contributes more than one-third of the state budget. As an example, he said that 11,800 aircraft crossed Syrian airspace in May alone, generating revenue for the public treasury.

Kadi said the most important element in relations between the public and private sectors is the clarity of the partnership itself, particularly through transparency in contracts and the adoption of environmental, social and governance (ESG) standards.

In this context, he said, the shift toward a green transition and the efficient use of resources should be viewed not as a luxury but as an economic necessity that can reduce long-term operating costs and prepare Syrian products for global markets.

A boy carries balloons as shoppers stroll through the old market in Damascus ahead of the Eid al-Adha holiday on May 26, 2026. (Photo by LOUAI BESHARA / AFP)

Institutionalizing partnership

The convening of the private sector dialogue in Damascus for the first time since its launch in 2018 marked a milestone in institutionalizing and localizing the process.

The question now, observers ask, is how far this shift can help bridge the “perception gap” and build mutual trust and accountability between traders and industrialists on one side and government institutions on the other.

Syrian economist Ziad Arabsh said the move contributes to narrowing that gap by transferring discussions from exile to the domestic arena, where industrialists, traders and government officials confront the same challenges, including electricity, raw materials and procurement.

He said trust is strengthened through direct dialogue without international intermediaries, while bringing all stakeholders together in one place creates social pressure to follow through on commitments.

Arabsh added that institutionalization helps bridge perceptions by transforming dialogue from a temporary initiative into a permanent institutional mechanism linked to the Ministry of Economy and UNDP. The conference, he said, also turns discussion from a theoretical exercise into a practical decision-making process.

Since the fall of the former regime, the Syrian government has been working to restore economic growth and attract domestic and foreign capital to participate in rebuilding the economy.

The World Bank estimated in November 2025 that rebuilding Syria would cost about $216 billion, while direct physical damage to infrastructure and residential and non-residential buildings amounted to roughly $108 billion.

Given the caution of foreign investors, experts broadly agree that expatriate Syrian capital and diaspora networks represent the most realistic and fastest source of financing in the near term.

Arabsh said translating policy recommendations into implementation plans with binding timelines requires a clear institutional mechanism. This should include a joint executive committee tasked with converting recommendations into action plans and specific projects, establishing implementation schedules, linking plans to realistic budgets, creating monitoring and evaluation systems, and tying compliance to incentives and penalties.

Without binding deadlines and public accountability, he said, recommendations risk remaining merely words on paper.

Regarding legal guarantees and banking mechanisms designed to encourage expatriate capital to return, Arabsh pointed to the protections contained in Law No. 114, including safeguards for private and industrial property, regulations guaranteeing the transfer of profits in foreign currencies, easier financial transfers from abroad, concessional financing for joint ventures and the activation of leasing finance.

He added that investment incentives include tax exemptions lasting between five and 10 years, industrial land at symbolic prices in industrial cities, and build-operate-transfer partnerships with the public sector that preserve state ownership while allowing efficient private-sector management.

Arabsh also highlighted diaspora initiatives, including European Union and International Fund for Agricultural Development support for members of the Syrian diaspora to strengthen agricultural investment, as well as digital platforms such as “Bunyan Syria” that connect expatriates with reconstruction projects.

“Expatriates need legal certainty, banking liquidity and tangible incentives, not just emotional appeals,” he said.

An international co-financing platform

In concluding remarks, Arabsh stressed the strategic importance of building strong ties with international financial institutions.

He said the prominent involvement of UNDP and the Japanese government provides a trusted international guarantee that could encourage the World Bank, the International Monetary Fund and regional development banks to engage with Syria’s emerging economic landscape.

Arabsh argued that UNDP’s strength lies in its ability to create structural integration on two fronts: a local track focused on supporting livelihoods and developing the micro, small and medium-sized enterprise sector, and a strategic track aimed at improving the national business environment.

He concluded that the most urgent priority today is to transform the dialogue into a “co-financing platform” capable of bringing together public resources, donor funding and private capital within a single productive framework, ensuring that the diverse capacities of the private sector evolve from a tool of resilience and survival into a genuine driver of sustainable economic revival.



Egypt Reaffirms Solidarity With Gulf States Against Iranian Attacks

Egyptian President Abdel Fattah al-Sisi visits Qatar and meets Emir Sheikh Tamim bin Hamad Al Thani on Tuesday. Egyptian Presidency/Handout
Egyptian President Abdel Fattah al-Sisi visits Qatar and meets Emir Sheikh Tamim bin Hamad Al Thani on Tuesday. Egyptian Presidency/Handout
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Egypt Reaffirms Solidarity With Gulf States Against Iranian Attacks

Egyptian President Abdel Fattah al-Sisi visits Qatar and meets Emir Sheikh Tamim bin Hamad Al Thani on Tuesday. Egyptian Presidency/Handout
Egyptian President Abdel Fattah al-Sisi visits Qatar and meets Emir Sheikh Tamim bin Hamad Al Thani on Tuesday. Egyptian Presidency/Handout

Egypt renewed its solidarity with Gulf states in the face of repeated Iranian attacks as President Abdel Fattah al-Sisi made another Gulf tour on Tuesday, visiting Qatar and Bahrain.

Sisi said Egypt was making intensive efforts to preserve regional stability and reduce the current tensions and escalation, stressing the importance of resolving crises through peaceful means.

Sisi visited Bahrain on Tuesday, where he was received upon arrival in Manama by King Hamad bin Isa Al Khalifa and members of the Egyptian embassy.

The Egyptian president reiterated his country’s support for the security and stability of Bahrain and condemned what he described as unjustified attacks on the kingdom’s territory.

He said the attacks represented a flagrant violation of international law and a dangerous escalation threatening regional security and stability.

Egyptian presidential spokesperson Mohamed el-Shennawy said Sisi had renewed Egypt’s rejection of any attempt to undermine the security and stability of Bahrain, Gulf Cooperation Council states or other Arab countries.

Sisi affirmed Egypt’s full solidarity with those countries and said Cairo stood beside them in any measures they took to safeguard their sovereignty and protect their peoples’ resources.

“The security of Arab states is an extension of Egyptian national security,” he said.

During the visit, Sisi praised what he described as Bahrain’s wisdom under the leadership of King Hamad bin Isa in working to preserve regional stability.

The Bahraini king welcomed Sisi to what he called his second home and expressed appreciation for Egypt’s support for Bahrain and the close fraternal relations between the two countries.

He also praised Egypt’s support for the security and stability of GCC and Arab states, stressing the need for continued close consultation and coordination between Bahrain and Egypt to preserve regional peace and stability and confront common challenges.

The two leaders discussed ways to continue joint efforts to reduce regional tensions and restore stability.

Doha visit

Sisi also visited Doha on Tuesday and met Qatar’s Emir Sheikh Tamim bin Hamad Al Thani, offering his condolences over the death of Sheikh Hamad bin Khalifa.

Sisi prayed that Qatar would be protected from harm and continue to enjoy security, stability and prosperity under Sheikh Tamim’s leadership.

The Qatari emir expressed his deep appreciation for Sisi’s visit and condolences, highlighting the close ties between Egypt and Qatar and the historic bonds between their peoples.

He said he hoped the Egyptian and Qatari sides would continue working to develop their relations and expand cooperation in the coming period.

The Egyptian president has held several calls with Gulf leaders since the Iran war began on Feb. 28, during which he affirmed Egypt’s readiness to provide all possible forms of support to safeguard the security of the Gulf and the wider region.

Sisi visited Saudi Arabia and Bahrain in March to express solidarity and condemn Iranian attacks against Arab states.

He also made a Gulf tour that month that included the United Arab Emirates and Qatar, during which he reiterated the need for an immediate end to the escalation and a return to serious dialogue and diplomatic means to resolve outstanding regional disputes.

In a related development, Egypt on Tuesday strongly condemned missile attacks targeting Saudi Arabia, saying they represented a dangerous escalation that threatened the kingdom’s security and territorial integrity and undermined efforts to reduce tensions and maintain regional security and stability.

In a statement, the Egyptian Foreign Ministry said it completely rejected all attacks targeting the security and sovereignty of Saudi Arabia or threatening the security and stability of countries in the region.

It renewed Egypt’s full solidarity with the kingdom and said Cairo stood beside Riyadh in confronting any threat to its security or territorial integrity.

Foreign Ministry condemnations

In separate statements issued on Sunday, the Egyptian Foreign Ministry condemned Iranian attacks involving missiles and drones that targeted Oman, Jordan, Kuwait, Bahrain, Qatar and the United Arab Emirates.

Cairo described the attacks as a dangerous development that violated the sovereignty of Arab and Gulf states and further heightened regional tensions.

It stressed the need to prioritize political solutions and comply with international law in a manner that preserved regional security and stability.

Egypt also condemned on Tuesday the targeting of two Emirati oil tankers as they passed through the Strait of Hormuz.

It described the incident as a serious violation of international law and a direct threat to maritime security, navigational safety and the free movement of trade through one of the world’s most important waterways.

Egypt said it rejected all acts targeting civilian vessels and facilities or endangering maritime security and global energy supplies.

It called for compliance with international law and an end to practices that could inflame tensions and broaden the regional escalation.

Cairo also expressed full solidarity with the United Arab Emirates and said it stood beside the country in confronting any threat to its security and interests.


FII Institute Announces Landmark 10th Anniversary Edition in Riyadh

 FII Institute and its global network have helped facilitate and spotlight more than $250 billion in investments and initiatives - SPA
FII Institute and its global network have helped facilitate and spotlight more than $250 billion in investments and initiatives - SPA
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FII Institute Announces Landmark 10th Anniversary Edition in Riyadh

 FII Institute and its global network have helped facilitate and spotlight more than $250 billion in investments and initiatives - SPA
FII Institute and its global network have helped facilitate and spotlight more than $250 billion in investments and initiatives - SPA

The Future Investment Initiative (FII) Institute will celebrate its 10th anniversary with FII10, taking place in Riyadh from October 26 to 29, 2026, under the theme “The Power of Legacy.”

“The Power of Legacy is not simply about celebrating the past decade,” said FII Institute CEO Princess Dr. Maha Bint Mishari Bin Abdulaziz. “It is about understanding how the decisions, investments, and partnerships we make today will shape generations to come, SPA reported.

FII10 represents both a reflection on what has been achieved and a commitment to what comes next.”

While the program themes and agenda will be revealed in the months ahead, FII10 will address the most pressing issues shaping the future of investment and humanity, creating a platform for bold ideas, meaningful partnerships, and transformative action.

Marking a defining milestone for one of the world’s leading global platforms for investment, innovation, and international dialogue, FII10 will celebrate a decade of impact while exploring the forces that will shape the next era of investment, growth, and global cooperation.

As artificial intelligence, technological disruption, shifting geopolitical dynamics, and evolving capital markets reshape economies and societies at unprecedented speed, the need for long-term thinking and trusted global dialogue has never been greater.

Since its inception, FII Institute and its global network have helped facilitate and spotlight more than $250 billion in investments and initiatives, demonstrating the power of convening capital, ideas, and leadership to create meaningful impact.

Today, FII Institute has grown into a year-round global platform, supported by more than 45 strategic partners from around the world and a thriving international membership community comprising thousands of members representing business, government, investment, academia, and innovation ecosystems across every region.


How Saudi Arabia's Buffers Shielded Its Economy from the Fires of War

Saudi flags fly along a street in the Saudi capital. (Asharq Al-Awsat)
Saudi flags fly along a street in the Saudi capital. (Asharq Al-Awsat)
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How Saudi Arabia's Buffers Shielded Its Economy from the Fires of War

Saudi flags fly along a street in the Saudi capital. (Asharq Al-Awsat)
Saudi flags fly along a street in the Saudi capital. (Asharq Al-Awsat)

At a time when the conflict between the United States and Iran plunged the region into one of its most severe periods of tension in years, closed the Strait of Hormuz, and drove up oil prices as well as shipping and insurance costs, Fitch Ratings reaffirmed Saudi Arabia's sovereign credit rating at A+ with a Stable outlook. The decision raises a fundamental question: How did the Saudi economy manage to preserve its financial resilience in the midst of the crisis?

The answer extends well beyond higher oil prices. It lies in a comprehensive framework of reforms built up over many years, including the creation of financial and logistical buffers, the diversification of funding sources, the development of energy infrastructure, and the strengthening of the private sector, all of which have made the economy far more capable of absorbing external shocks.

As the international financial and business community awaits the International Monetary Fund Executive Board's comprehensive report on its 2026 Article IV Consultation with Saudi Arabia, due later this month, data released by the Fund's mission, together with figures from the Saudi Central Bank and the Kingdom's balance of payments, reveal how the Saudi economy weathered one of the most challenging geopolitical tests in recent years.

Alternative Arteries

When Tehran announced the closure of the Strait of Hormuz, through which roughly one-fifth of global oil trade passes, many expected Gulf oil exports to face widespread disruption. Saudi Arabia, however, had been preparing for such a scenario for decades by building an integrated system to safeguard its oil exports without relying solely on the Strait.

That strategy included expanding the East-West Pipeline, which transports crude oil to the Red Sea ports of Yanbu, increasing its carrying capacity, establishing strategic storage facilities in key markets around the world, and maintaining the world's largest spare oil production capacity.

When the crisis erupted, this system enabled Saudi Aramco to continue honoring its export commitments. The company increased supplies through the pipeline, drew on its overseas inventories, and utilized part of its spare production capacity, limiting the decline in shipments and mitigating the impact of the Strait's closure on Saudi oil exports.

Why Did Inflation Remain Low?

Although the conflict pushed up global oil prices as well as shipping and marine insurance costs, the transmission of those shocks to the domestic economy remained limited compared with many other economies.

This was largely due to efficient supply chains, the stability of the Saudi riyal's peg to the US dollar, ample strategic reserves of essential goods, and fiscal and monetary policies that helped preserve market stability.

As a result, the International Monetary Fund expects average inflation in Saudi Arabia to reach only about 2.3 percent in 2026, a level that remains low compared with most advanced and emerging economies.

Current Account Surplus

At first glance, the conflict might have been expected to weaken Saudi Arabia's external accounts. Yet first-quarter data told a different story. The Kingdom recorded a $4.1 billion current account surplus, its first in nearly two years following a prolonged period of deficits, compared with a $8.2 billion deficit in the fourth quarter of 2025.

This turnaround resulted from a twofold equation. Although oil export volumes declined because of the disruption, higher prices offset much of the shortfall. At the same time, imports slowed amid shipping disruptions, while the travel balance improved as spending by visitors within the Kingdom increased.

An aerial view of the Saudi capital. (Reuters)

The Tools That Reinforced Stability

The current account surplus was only one factor underpinning the economy's resilience. Saudi Arabia also entered the crisis equipped with a range of financial strengths that helped preserve stability. The data point to several key pillars:

Reallocation of External Assets: Investment operations by government entities and Saudi Arabia's sovereign wealth fund recorded a sharp increase in the liquidation of foreign assets during the first quarter of 2026. Assets sold or repatriated totaled approximately $22.6 billion, up from just $4 billion in the fourth quarter of 2025, an increase of 460 percent. This sharp rise reflects an accelerated redeployment of external liquidity into the domestic economy.

Stable Reserve Assets: While government entities significantly increased the monetization of foreign assets, the Saudi Central Bank's reserve assets remained robust and stable, standing at SAR 1.862 trillion (approximately $496.5 billion) at the end of the first quarter, up 9.32 percent year over year. This illustrates an efficient allocation of financing roles. Rather than drawing directly on the Kingdom's official foreign exchange reserves, government entities chose to rebalance their investment portfolios and monetize part of their overseas assets to finance domestic projects, strengthening Saudi Arabia's financial buffers and reinforcing the foundations of its sovereign creditworthiness.

Sovereign Creditworthiness: These indicators in the balance of payments and the level of reserve assets were directly reflected in the Kingdom's sovereign credit profile. In their 2026 reviews, the major global credit rating agencies reaffirmed the structural strength of the Saudi economy and its high degree of resilience to regional geopolitical shocks. Fitch Ratings and S&P Global Ratings both affirmed Saudi Arabia's A+ rating with a Stable outlook, while Moody's maintained its Aa3 rating.

According to the agencies' reports, these ratings are fundamentally supported by the Kingdom's substantial net foreign sovereign assets and financial reserves, which provide external payment coverage well above that of similarly rated countries. They also reflect the growing resilience of the non-oil economy and Saudi Arabia's ability to secure alternative sources of financing for Vision 2030 projects without drawing down its core monetary reserves.

Proactive Financing: Before the crisis escalated, the government leveraged its strong credit profile and relatively low public debt, equivalent to 34.4 percent of GDP, to secure $13 billion in external financing during the first quarter, according to the National Debt Management Center's announcement in January. An additional $14 billion was raised through international sukuk issuances, commercial loans, and bond offerings by major Saudi banks and corporations, which also benefited from the Kingdom's strong sovereign credit standing. As a result, total external borrowing by Saudi residents reached $27 billion.

Investment Flows: The investment sector likewise reflected the depth of global institutional confidence. Contrary to the capital flight often seen during periods of geopolitical tension, the Saudi stock market experienced no wave of foreign investor withdrawals. Instead, nonresident investors remained net buyers of Saudi equities, recording net purchases of $2.4 billion during the first half of 2026, bringing their total holdings to more than $110 billion. This was accompanied by exceptional resilience in foreign direct investment, which posted $1.8 billion in net inflows during the first quarter alone, supported by growing confidence in the ongoing economic and legislative reforms under Vision 2030.

Banking Sector: The strength of the banking sector also enhanced the economy's ability to weather the period of heightened tensions. Saudi banks maintained high levels of capitalization and liquidity while private sector lending continued to expand, ensuring businesses and projects retained access to financing despite turbulence in global markets. The International Monetary Fund considers the soundness of the financial sector to have been one of the principal pillars supporting economic stability throughout the crisis.

A participant at a conference organized by the International Monetary Fund in cooperation with the Ministry of Finance in Riyadh. (Photo by Turki Al Aqili)

What Has Vision 2030 Changed?

Perhaps the best way to measure the success of Saudi Arabia's reforms is to ask a hypothetical question: What if the current crisis had occurred before the launch of Vision 2030?

At that time, the economy depended far more heavily on oil revenues, while financing tools and liquidity management options were considerably more limited. The contribution of non-oil activities was also substantially smaller than it is today.

Today, however, the economy rests on a far more diversified foundation, encompassing non-oil revenues, domestic and international debt markets, a strong banking sector, the Public Investment Fund, substantial foreign reserves, and advanced logistics infrastructure. Together, these elements have provided the Kingdom with a robust financial safety net, enabling it to absorb the shock without experiencing major disruptions.

The IMF's Assessment

The International Monetary Fund's 2026 mission concluding statement documented the Saudi economy's positive indicators, affirming that the economy has demonstrated a high degree of adaptability and a clear capacity to withstand external shocks. The Fund attributed this resilience to the structural strength of the national economy, the continued development of logistics infrastructure, and the ongoing expansion and diversification of the Kingdom's productive base and non-oil sectors.

At the same time, the IMF lowered its forecast for Saudi Arabia's economic growth in 2026 to 1.7 percent, a reduction of 0.3 percentage points from its previous projection. However, it raised its forecast for 2027 to 5.5 percent.

The downward revision does not reflect underlying weakness in the Saudi economy as much as it reflects the impact of the regional environment. Despite recording growth of approximately 3 percent in the first quarter of 2026, continued geopolitical tensions and higher shipping and insurance costs could weigh on the pace of economic activity during the remainder of the year.

Challenges Remain

Despite the strength of Saudi Arabia's financial and logistical buffers, a prolonged period of regional tensions could pose additional challenges. These include higher transportation and insurance costs, slower global trade, the possible postponement of certain investments, and mounting pressure on major development projects should energy and logistics costs remain elevated. For this reason, the International Monetary Fund emphasizes that continued structural reforms, a greater role for the private sector, and stronger productivity will remain essential to sustaining growth in the years ahead.

Resilience Has Become Economic Policy

The experience of recent months shows that what Saudi Arabia faced was not merely an oil crisis or a passing geopolitical test. Rather, it was a comprehensive test of the economy's ability to absorb and manage shocks. The convergence of a current account surplus, the redeployment of external assets, the preservation of strong foreign reserves, the securing of low-cost financing, and the continued inflow of investment demonstrates that sovereign liquidity management has become an integral part of a comprehensive economic strategy rather than a temporary response to crises.

As the International Monetary Fund's final report is awaited, the message emerging from Saudi Arabia's experience is clear: investment in economic resilience has become one of the Kingdom's most important sovereign assets, and perhaps its most valuable one, in a world increasingly marked by geopolitical and economic shocks.