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Saudi GDP Exceeds $1 Tln, Shows Kingdom’s Economy Is on Right Track

Saudi Minister of Finance Mohammed Al-Jadaan speaks at the second Financial Sector Conference in Riyadh on Wednesday. (Bashir Saleh)
Saudi Minister of Finance Mohammed Al-Jadaan speaks at the second Financial Sector Conference in Riyadh on Wednesday. (Bashir Saleh)
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Saudi GDP Exceeds $1 Tln, Shows Kingdom’s Economy Is on Right Track

Saudi Minister of Finance Mohammed Al-Jadaan speaks at the second Financial Sector Conference in Riyadh on Wednesday. (Bashir Saleh)
Saudi Minister of Finance Mohammed Al-Jadaan speaks at the second Financial Sector Conference in Riyadh on Wednesday. (Bashir Saleh)

The size of Saudi Arabia’s GDP, which reached $1.7 trillion in 2016, demonstrated that the Kingdom’s economy is on the right path as it advances the implementation of Vision 2030.

Vision 2030 is a unique transformative blueprint that aims to diversify and double the size of the Saudi economy, so it becomes one of the largest world economies. It also looks to establish a sustainable future in all fields.

Speaking at the second Financial Sector Conference in Riyadh, Minister of Finance Mohammed Al-Jadaan affirmed that the Kingdom has achieved remarkable results within the comprehensive development process, whose features were drawn by Vision 2030.

The progress took place under the directives of Custodian of the Two Holy Mosques King Salman bin Abdulaziz and the direct supervision of Prince Mohammed bin Salman, Crown Prince and Prime Minister.

Al-Jadaan opened on Wednesday the two-day conference organized by the partners of the Financial Sector Development Program, including the Ministry of Finance, Saudi Central Bank and Capital Market Authority.

Relationship with Iran

Al-Jadaan stressed that the re-establishment of Saudi-Iranian diplomatic relations paves the way for discussing opportunities for cooperation and investment between the two countries.

The minister noted that Iran is a neighboring country, and there are no obstacles that prevent normalization. He added that the Kingdom is committed to the principles of the recently concluded agreement with Iran.

Bank assets

According to Al-Jadaan, top achievements since the launch of Vision 2030 include Saudi Arabia becoming one of the fastest-growing financial markets worldwide.

Saudi banking assets have increased by 37% since 2019, reaching SAR3.6 trillion ($960 billion) by the end of last year. Moreover, the number of financial technology companies has risen from 20 in 2019 to 147 in 2022.

The minister added that the financial sector holds the key to the prosperity of the Kingdom’s traditional and digital infrastructure, and that ambitious goals have been set for the development of the financial sector.

International institutions

“The Kingdom is a reliable investor partner. In this regard, five international financial institutions have joined the local First Traders’ Program, where the Public Investment Fund issued the first-ever $3 billion international green bond in October; the second issue of $5.5 billion was completed last month, boosting the Kingdom’s successes,” said Al-Jadaan.

“Also, the National Development Fund (NDF) last year injected some $4 billion to support domestic and international investors to implement projects in the industrial, energy, mining, and logistics sectors,” he added.

E-Payments

The minister revealed that the percentage of electronic payments in the retail sector amounted to about 57% of the total transactions.

Furthermore, Al-Jadaan said that the number of small and medium sized enterprises (SMEs) has nearly doubled since 2016 as the share of bank financing going to SMEs reached 7.9 % and 45 % of SMEs are owned by Saudi women.

Al-Jadaan explained that the Kingdom today has strong economic and financial foundations, with an average inflation rate of 2.5 % in 2022. This figure is one of the lowest among G20 countries.

In addition, non-oil revenues reached 35% of expenditures in 2022.

GDP growth in 2022 reached 8.7 %, supported by a healthy growth in non-oil GDP, which amounted to 5.4 %.

Localization rate

Al-Jadaan also talked about the high rates of localization in the private sector.

“The Female participation rate in the labor market is now 37 %. Consumption is strong and home ownership has grown to a record 62 %, while real estate lending quadrupled since 2018,” he said.

Al-Jadaan said that the Saudi Privatization Program has a pipeline of over 200 projects in 17 targeted sectors, creating tremendous opportunities for investors.

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Business

Saudi Economy Accelerates as Diversification and Legal Reforms Drive Growth

Quality of life represents a strategic national priority in Saudi Arabia (SPA). 
Quality of life represents a strategic national priority in Saudi Arabia (SPA). 
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Saudi Economy Accelerates as Diversification and Legal Reforms Drive Growth

Quality of life represents a strategic national priority in Saudi Arabia (SPA). 
Quality of life represents a strategic national priority in Saudi Arabia (SPA). 

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.

 

 

Business

US Fed Expected to Hold Rates Steady as Iran War Roils Outlook

The US-Israel war on Iran has seen energy infrastructure damaged across the Middle East, sending shockwaves through global markets. AFP
The US-Israel war on Iran has seen energy infrastructure damaged across the Middle East, sending shockwaves through global markets. AFP
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US Fed Expected to Hold Rates Steady as Iran War Roils Outlook

The US-Israel war on Iran has seen energy infrastructure damaged across the Middle East, sending shockwaves through global markets. AFP
The US-Israel war on Iran has seen energy infrastructure damaged across the Middle East, sending shockwaves through global markets. AFP

US Federal Reserve policymakers are expected to leave interest rates unchanged at their meeting next week, as the US-Israel war on Iran sends shock waves through markets and recent economic data has begun to show weakness.

The Fed will start its two-day meeting on Tuesday, with an announcement of the benchmark lending rate in the world's largest economy a day later.

The central bank cut rates three consecutive times last year before holding them steady at its January meeting, said AFP.

It has a dual mandate of holding inflation near a long-term target of two percent while ensuring maximum employment.

With war in the Middle East causing global oil prices to spike, potentially increasing overall inflation and curbing growth, analysts say policymakers are unlikely to make any moves now.

"This is certainly a bind for the Fed, because supply shocks are extremely hard to deal with in that they lift inflation and they curb output," EY-Parthenon chief economist Gregory Daco told AFP.

Affordability is a key political issue for President Donald Trump, who has claimed that prices are cooling even as consumers complain of the high costs of basic goods.

Trump has repeatedly insulted Fed Chair Jerome Powell as he demands lower rates, and the Justice Department threatened Powell with a criminal indictment as part of an investigation into cost overruns for a Fed renovation project.

While consumer inflation has dropped from a peak of 9.1 percent during the Covid pandemic, it remains well above the Fed's two- percent target.

"Unlike other countries, which have already achieved some level of price stability, we're five years in without price stability," said Diane Swonk, chief economist at KPMG.

She warned that, depending on how long the Iran war lasts, inflation could again soar past four percent.

"I think the main story here is that we are seeing inflation moving away from the Fed's two-percent target, and that will lead many Fed policymakers to adopt an even more hawkish stance," said Daco.

- Duelling mandates -

Raising rates to cool the economy, however, could bring the Fed into tension with its other mandate: managing unemployment.

The United States unexpectedly lost 92,000 jobs in February, government data showed, while the unemployment rate rose to 4.4 percent.

Analysts say a relatively steady unemployment rate has been masking churn beneath the surface.

Labor demand has been dropping, but unemployment has not spiked because that has been accompanied by a drop in supply due to Trump's immigration crackdown.

Daco said labor demand gauges were showing signs of concern, including a weak hiring rate "at a decade low," slowing wage growth and business leaders talking about labor replacement due to AI.

Swonk noted that spiking uncertainty due to war in Iran and its knock-on effects would further curb labor demand.

"Uncertainty acts as its own tax on the economy, and one of the first lines of defense that firms do is they freeze hiring," she said.

And recent data ahead of the Fed meeting is not encouraging, with US GDP growth revised sharply lower in the final months of 2025.

- 'Rock and a hard place' -

Some Fed policymakers, however, have been cautious in describing the possible inflationary shocks of the war.

Fed Governor Christopher Waller expressed sympathy on Bloomberg TV last week for consumers facing spiking gasoline prices.

"But for us thinking about policy going forward, this is unlikely to cause sustained inflation," he said.

Swonk warned however that any economic slowdown from the war could be tough to recover from in the immediate term.

"I think people are discounting the risk of the lingering effects," she said, noting that supply disruptions affect more than oil prices.

"There's no question they're between a rock and a hard spot, and it just got harder," Swonk said of policymakers having to balance inflation and unemployment.

To Daco, however, uncertainty means the Fed is more likely to hold rates steady "for a long period of time."

Traders have begun to reduce their outlook for rate cuts, and Swonk said that hikes could even be on the menu.

"This is not a one-way street. We're at a busy intersection, and the stoplight's broken," she said.

Business

Fitch Affirms ‘AA’ Credit Rating for Qatar

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
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Fitch Affirms ‘AA’ Credit Rating for Qatar

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)

Fitch Ratings affirmed Qatar's long-term foreign-currency rating at "AA" and a "stable" outlook on Friday, saying its strong balance sheet and plans to sharply increase LNG output should help cushion the impact of the escalating Middle East conflict.

The US-Israel war with Iran has disrupted shipments from the world's most important oil artery, the Strait of Hormuz, which is responsible for 20% of global oil and liquefied natural gas supply.

The impact on LNG exports is likely ⁠to widen Qatar's ⁠fiscal deficit in 2026, contingent on how long the conflict lasts, but the country should be able to more easily tap debt markets or draw on its sovereign wealth fund, the Qatar Investment Authority (QIA), which has built up ⁠assets over decades of investing at home and globally.

Fitch said it assumes the conflict would last less than a month and the strait would remain closed during that period, with no major damage to regional hydrocarbon infrastructure. Under its baseline scenario, the agency expects Brent crude to average $70 a barrel in 2026.

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 and exceed 7% by 2030. Excluding investment income, the budget is expected to return to surplus from 2027, with most excess revenue likely to be transferred to QIA for overseas investment.

The agency expects Qatar to meet its 2026 funding needs through a combination of central bank overdrafts, domestic and international market borrowing, and drawdowns on the finance ministry's deposits in the banking sector.