Saudi Arabia’s economic diversification efforts are set to continue to bear fruit as the Kingdom’s non-oil economy is projected to expand between 3 percent and 4 percent each year until 2030, according to an expert at Moody’s Analytics.
In a recent webinar, Catarina Noro, an economist at Moody’s Analytics, said that Saudi Arabia’s economy has shifted in the past decade, with the non-oil sector contributing to a growing share of the Kingdom’s gross domestic product growth.
“We project the non-oil economy will expand between 3 percent and 4 percent annually until 2030, making up about 56 percent of Saudi’s GDP,” she said.
Noro further added that Moody’s is expecting growth from Saudi Arabia’s oil sector to stay between 0.5 percent and 1.5 percent after 2025 until 2030.
Strengthening the non-oil private sector is crucial for Saudi Arabia as diversifies its economy away from oil in line with its goals outlined in Vision 2030,
“Saudi Arabia’s continued provision of credit facilities to small- and medium-sized enterprises should stimulate growth in vital sectors such as tourism and construction,” she explained.
According to Noro, Saudi Arabia should focus on labor force expansion to sustain the ongoing momentum of non-oil private sector growth.
“Increasing female participation rate and growth of the expatriate population will play a critical role. This expanding labor force will, in turn, foster the growth of the private sector and the non-oil economy,” she noted.
Earlier in December, a report released by Saudi Arabia’s General Authority for Statistics revealed that the Kingdom’s non-oil activities increased by 3.5 percent in the third quarter of this year.—AN
