• Wed. Apr 17th, 2024

Saudi Arabia Shifts Away from Oil with Non-Oil Sector Reaching 50% of GDP

BySamantha Jones

Apr 2, 2024
Saudi Arabia Reaches a Milestone in Diversifying Away from Oil-Based Economy

Saudi Arabia is experiencing a significant shift away from its longstanding dependence on oil as the non-oil sector now accounts for 50% of the country’s GDP for the first time in 2023. This marks a major milestone in the country’s diversification efforts and moves towards achieving the goals set out in Vision 2030, which aims to reduce dependency on fossil fuels.

Government data shows that the non-oil sector achieved a real GDP growth rate of 4.4% last year, reaching approximately 1.7 trillion Saudi riyals. This growth is supported by incentives introduced by the government to promote the growth of services and manufacturing industries, which are seen as vital for creating job opportunities for the country’s young and educated population.

Despite this progress, Saudi Arabia experienced a decline in real GDP of 4.3% in 2023 due to reduced activity in the oil sector caused by production cuts by OPEC countries. However, other sectors such as mining and quarrying remain crucial for the country, accounting for one-third of total non-oil output, while manufacturing, real estate, and construction also make significant contributions to the economy.

Private consumption in sectors like entertainment, hospitality, and tourism drove much of the non-oil sector’s growth last year, accounting for 40% of economic activity. The tourism sector has seen significant growth with $13 billion in private investments and attracting millions of visitors both domestically and internationally. Overall, Saudi Arabia is making progress towards economic diversification and reducing its dependence on oil revenues.

Incentives introduced by the government have been instrumental in promoting services and manufacturing industries which are seen as vital for creating job opportunities for young and educated population. Private consumption has played a crucial role in driving much of non-oil sector’s growth last year with sectors like entertainment, hospitality & tourism accounting for approximately 40% of economic activity.

The government has been actively working towards achieving goals set out in Vision 2030 which aims to reduce dependency on fossil fuels. Despite facing challenges like reduced activity due to production cuts by OPEC countries causing a decline in real GDP of 4.3% , other sectors such as mining & quarrying remain crucial while manufacturing , real estate & construction also contribute significantly to economy.

The tourism industry has witnessed rapid growth with $13 billion investment from private investors attracting millions domestic & international visitors showing that there are vast opportunities available beyond just relying solely on oil revenue streams.

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

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