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Saudi Arabia Fortifies Itself Against External Shocks with Proactive Measures in 2024 Budget

Saudi budget expectations for 2024 are positive in light of the developments and challenges facing the global economy. (SPA)
Saudi budget expectations for 2024 are positive in light of the developments and challenges facing the global economy. (SPA)
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Saudi Arabia Fortifies Itself Against External Shocks with Proactive Measures in 2024 Budget

Saudi budget expectations for 2024 are positive in light of the developments and challenges facing the global economy. (SPA)
Saudi budget expectations for 2024 are positive in light of the developments and challenges facing the global economy. (SPA)

Saudi Arabia has taken proactive measures to boost the ability of its economy to face challenges and developments, and to ensure financial sustainability.

This is reflected in the figures in the preliminary statement of the 2024 budget, through which the Kingdom is targeting revenues of SAR1.1 trillion ($312 billion), compared to expenditures of about SAR1.2 trillion ($333 billion), and a limited deficit of SAR79 billion ($21 billion), which represents 1.9 percent of the GDP.

The non-oil sector is a fundamental driver of economic growth in Saudi Arabia, highlighting major success in the process of economic diversification, one of the main goals of Vision 2030.

In a statement, the Ministry of Finance expected non-oil activities to grow at a rate of 5.9 percent during the current year, noting that this rate reached 6.1 percent in the second quarter of 2023.

In a recent interview with Fox News, Crown Prince Mohammed bin Salman emphasized the non-oil sector’s contribution to the Kingdom’s gross domestic product, which helped the Saudi economy achieve the highest growth rate among the G20 countries in 2022.

The International Monetary Fund (IMF) also announced last week that the Saudi economy was witnessing an economic transformation after implementing several reforms to reduce dependence on oil, diversify sources of income, and enhance competitiveness.

Reform measures

Experts believe that the structural improvements undertaken by the government have enhanced the growth of the domestic product of non-oil activities, which has been reflected positively on the performance of the country’s general budget.

In remarks to Asharq Al-Awsat, Economist Ahmed Al-Shehri said Saudi Arabia has carried out effective reform and crisis containment policies, supported by financial abundance and high foreign exchange reserves. The Kingdom’s economy stands on solid foundations, which are seen in the results of the state’s general budget in 2024.

Economic expert Ahmed Al-Jubeir told Asharq Al-Awsat that the government has put in place reform policies and measures to protect the economy from global crises.

He added that the policy of economic diversification and support for non-oil activities reflected positively on the performance of the general budget.

Financial sources believe that the expected deficit was due to increased spending on important sectors, such as defense, education and health.

In the preliminary statement for the 2024 budget, Saudi Arabia announced its continued work to raise the efficiency of spending and financial control, the sustainability of public finances, the implementation of economic and financial reforms, and the achievement of the goals of Vision 2030 and its major programs, initiatives and projects.

Local investment

According to the statement, the government will seek to raise the level of services provided to citizens and residents, in addition to promoting the growth of local investment by empowering the private sector and qualifying it to include all regions of the Kingdom.

It emphasized the proactive structural and financial measures adopted by Saudi Arabia to enhance the capacity of its economy, which improved the performance of the non-oil sector and increased the number of workers.

The government said all of these measures would contribute to the growth of the domestic product, attract investments, and stimulate economic activity, while developing public financial performance by increasing the financial space and building government reserves in a way that boosts the economy’s ability to confront global crises.

Economic diversification

Finance Minister Mohammed Al-Jadaan said the government will seek to implement structural reforms, with the aim of developing and diversifying the economy and raising growth rates while maintaining financial sustainability.

He pointed to the launching of many initiatives and strategies that aim to encourage promising economic sectors, improve investment attraction, stimulate industries, and raise the percentage of local content and non-oil exports.

Al-Jadaan underlined the importance of analyzing the financial and economic risks facing the country in order to tailor effective policies and strategies.

According to the Minister, preliminary estimates for next year point to a real GDP growth of 4.4 percent, supported by non-oil activities, amid expectations that the private sector will continue to lead economic growth and contribute to increasing business opportunities and creating jobs, in addition to improving the trade balance.

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Business

IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.