Moody’s forecasts a consistent annual growth rate of 4% for Saudi Arabia’s non-oil economy until 2030.

Saudi Arabia’s endeavors in economic diversification are poised to yield significant results, with projections indicating that the non-oil sector will witness annual growth rates ranging between 3 percent and 4 percent until 2030, according to insights shared by an economist from Moody’s Analytics, Catarina Noro, during a recent webinar.

Over the past decade, there has been a notable shift in Saudi Arabia’s economic landscape, with the non-oil sector increasingly contributing to the Kingdom’s GDP growth. Noro emphasized that this trend is expected to continue, with the non-oil economy projected to constitute approximately 56 percent of Saudi Arabia’s GDP by 2030.

Moody’s Analytics also anticipates a relatively modest growth rate of between 0.5 percent and 1.5 percent in Saudi Arabia’s oil sector from 2025 onwards until 2030.

Noro highlighted the critical importance of bolstering the non-oil private sector to align with the objectives outlined in Vision 2030, emphasizing that the continued provision of credit facilities to small and medium-sized enterprises (SMEs) by Saudi Arabia is vital. This support is anticipated to stimulate growth, particularly in sectors such as tourism and construction.

To sustain the momentum of growth in the non-oil private sector, Noro suggested a focus on expanding the labor force, emphasizing the significance of increasing the female participation rate and accommodating the growth of the expatriate population. A burgeoning labor force is expected to foster further growth in the private sector and the non-oil economy.

Recent reports affirm the positive trajectory of the non-oil private sector in Saudi Arabia. The General Authority for Statistics disclosed that non-oil activities in the Kingdom expanded by 3.5 percent in the third quarter of the current year. Additionally, the Small and Medium Enterprises General Authority (Monsha’at) reported a 3.5 percent increase in the number of SMEs in the Kingdom, reaching 1.27 million by the end of the third quarter. Notably, more than 40,000 new businesses were launched during this period, with Riyadh accounting for 43.3 percent of SMEs in the Kingdom.