In mid-January, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, said that Saudi Arabia had become a bright spot for the world and regional economies.
Speaking at a session at the World Economic Forum (Davos), Georgieva explained that when she visited Saudi Arabia, she was incredibly impressed by the Kingdom's progress in implementing Vision 2030.
Saudi Arabia radiated in a dark global economy, not by chance or luck. Instead, it resulted from continuous work that began six years ago when the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, issued a royal decree naming Prince Mohammed as Crown Prince.
Over the past half-decade, the Saudi economy witnessed significant changes, mainly driven by government efforts to reduce dependence on oil revenues and build a diversified economy.
The changes included several reforms and initiatives resulting from Vision 2030, as planned and implemented by Crown Prince Mohammed, the Prime Minister and "Godfather of the Vision." They were aimed at modernizing and transforming the country's economy.
Ridding the Country of Oil Addiction
Prince Mohammed, a man of "difficult missions," led plans and projects for economic transformation in Saudi Arabia.
The Crown Prince worked to transform the country into a continuous workshop at all levels and establish new sectors and include them within the economic fields of the country, up to developing systems and legislation that contributed to accelerating setting short and medium-term goals.
At the same time, the Prince was working on establishing deep infrastructure that would lead to a new phase of keeping pace with global economic changes, including building a vast digital economy and fortifying its sectors in various fields.
On Apr. 25, 2016, Crown Prince Mohammed launched Vision 2030, which focused on diversifying the Saudi economy, leading the country away from "oil addiction," and building new sectors that were previously idle.
"We have developed a case of oil addiction in Saudi Arabia which disturbed development," the Crown Prince said.
Since then, the role of non-oil sectors has emerged in supporting the country's budget, reaching about 32 percent last year.
Minister of Finance Mohammad al-Jadaan indicated that non-oil revenues covered 40 percent of the expenditures in 2021 after initially covering only 10 percent.
The fastest-growing economy in the world
Saudi Arabia topped the G20 countries in 2022 with the highest growth.
The Saudi General Authority for Statistics (GASTAT) announced that the country's gross domestic product (GDP) achieved a growth rate of 8.7 percent over the past year, the fastest growth rate in 11 years, driven by a growth in oil activities by 15.4 percent.
In 2022, non-oil and government services activities rose 5.4 percent and 2.6 percent, respectively.
In this regard, the Director of the Middle East and Central Asia Department at the IMF, Jihad Azour, said earlier that Saudi Arabia has carried out essential reforms during the past years, which have developed and diversified the country's sources of income.
He also noted that the Kingdom developed modern and advanced financial systems that controlled public spending and established a medium-term strategy that gave a clearer vision and contributed to better management of public finances.
Azour added, in an interview with Asharq Al-Awsat, that these contributions were complemented by reforms in public finances, creating job opportunities and investments.
It placed Saudi Arabia at the top of G20's fastest-growing economies, enabling the Saudi economy to create investments and grow despite the global economic crisis.
Trillion budget
The Saudi cabinet approved a $296 billion budget for 2023 with revenues of $301 trillion next year, with a surplus of $4.2 billion, equivalent to 0.4 percent of GDP.
The Ministry of Finance said that the 2023 budget supports the continuation of fiscal sustainability and the economic and structural reforms aimed at strengthening the financial position of Saudi Arabia, enhancing monetary flexibility, and keeping pace with the rapid global changes.
It also affirms its endeavor to implement programs and projects that support growth, expand the economic base, and achieve comprehensive development.
Growth engines
One of the main drivers of the growth of the Saudi economy over the past five years has been the government's focus on diversifying the economy, namely developing non-oil sectors.
It included initiatives to support small and medium enterprises and investment in multiple areas such as tourism, renewable energy, mining, military industries, entertainment, and culture.
Other significant developments in the Saudi economy included the liberation and privatization of about 16 sectors, such as education, health, environment, water, agriculture, energy, finance, and media.
It led to the creation of new opportunities for companies and businessmen and helped attract foreign investment to the Kingdom.
The Public Investment Fund is the key to transformation
The Public Investment Fund (PIF), the Kingdom's key to transformation, is an example of managing the economy towards diversification, and investing in promising sectors, as part of efforts to achieve the required balance in the Saudi economy.
It aimed to place the Kingdom on the map of global producers, such as the traditional and renewable energy sector, entertainment, sports, industry, culture, and others.
PIF Governor Yasir al-Rumayyan said the Kingdom has carried out a comprehensive diagnosis and study of the Saudi economy, which included comparisons with other economies, employing in that endeavor the best expertise and performance indicators to achieve the targeted objectives.
Rumayyan explained that the Kingdom has all the financial and human resources capabilities to realize Vision 2023.
PIF was managing assets valuing $150 billion in 2015 and now has around $650 billion, targeting an increase in the value of its assets to $1 trillion in 2025 and between $2-3 trillion by 2030.
The governor indicated that the fund is the world's largest investor in renewable energy and green hydrogen. It works within the national objectives and the Saudi climate action, which seeks to reach net zero emissions by 2050.
The Saudi economy was expected to grow by 7.5 percent, the highest growth among developing countries, said Rumayyan, adding that it exceeded the forecast, cut down unemployment rates from 13 percent to nine percent, and created half a million job opportunities, with targets set to double the number to 1.5 million by 2025.
