Dubai: Saudi Arabia's non-oil gross domestic product (GDP) growth is anticipated to stay robust in the medium term, driven by the Vision 2030 initiative's expansion in consumer spending, tourism, and construction, according to a S&P Global Ratings.
The agency's report highlights that Saudi Arabia's non-oil GDP has increased over the past decade, surpassing the growth of the oil sector, according to a report by Saudi financial news portal Argaam.com.
Retail, government, and finance sectors have been the primary contributors to this growth. Although recent oil production cuts have caused some setbacks, indicators suggest that the non-oil sector will perform strongly later this year.
Current data shows promising potential for increased household consumption, which would boost the non-oil sector's share of the economy. The oil sector's critical role is reflected in its substantial contribution, accounting for over 30 per cent of GDP in early 2024.
The report also notes that construction activities related to megaprojects will drive domestic demand. The total cost of these Vision 2030 megaprojects is estimated to exceed $1 trillion (Dh3.67 trillion), nearly 90 per cent of Saudi Arabia's GDP.
Saudi Vision 2030 is a government programme launched in 2016 with the aim of diversifying the economy away from oil.
Even if the scale of the NEOM project is scaled back, the construction of these megaprojects and associated spending will continue to be a major growth driver over the next five years.
However, the impact on GDP may be somewhat moderated by the increase in imports of construction materials and dependence on external parties.
