Saudi Arabia’s Economic Transformation: Non-Oil Sector Soars to 54.8% of GDP
By Shayne Heffernan
Saudi Arabia’s economic landscape is undergoing a profound shift, with the non-oil sector now contributing an impressive 54.8% to the Kingdom’s GDP, as announced by Economy Minister Faisal bin Fadhil Alibrahim in a recent statement reported by KSA.com. This milestone marks a significant achievement in the Kingdom’s Vision 2030 agenda, which aims to diversify the economy away from its historical reliance on oil revenues and foster sustainable growth across multiple industries. As someone who has been closely tracking Saudi Arabia’s progress, I’m struck by how this development reflects a strategic vision that’s not only reshaping the nation’s economic identity but also positioning it as a global leader in innovation and diversification.
The rise of the non-oil sector to 54.8% of GDP, up from 51% in 2024, highlights the success of Vision 2030 in cultivating growth in areas such as technology, tourism, manufacturing, and renewable energy. The technology sector, in particular, has seen remarkable advancements, with the Kingdom’s digital economy valued at over SR495 billion ($132 billion USD) as of late 2024, making it the largest in the Middle East and North Africa region, according to the Saudi General Authority for Statistics (GASTAT). Internet penetration stands at an impressive 98%, and mobile subscriptions exceed 120% of the population, per Trading Economics data, providing a robust foundation for digital innovation. Digital payments now account for 62% of transactions, a significant jump from 50% just three years ago, reflecting a societal shift toward a cashless economy driven by initiatives like the Saudi Central Bank’s (SAMA) financial innovation sandbox, which has nurtured fintech startups and bolstered financial inclusion.
Tourism is another key driver of this economic diversification, aligning with Vision 2030’s goal to attract 150 million visitors annually by 2030. In 2024, Saudi Arabia welcomed 109 million tourists, generating $36 billion in revenue—a 10% increase from the previous year—thanks to mega-projects like the Red Sea Project and AlUla, which have drawn global attention, according to the Ministry of Tourism. The renewable energy sector is also gaining traction, with the Kingdom targeting 50% of its energy from renewables by 2030. Projects like the $8.1 billion Sudair Solar PV plant and the $5 billion green hydrogen facility in NEOM have boosted renewable energy capacity to 3.5 GW in 2024, a 25% increase from 2023, supported by $50 billion in investments from the Public Investment Fund (PIF). These efforts not only reduce domestic oil consumption but also position Saudi Arabia as a leader in sustainable energy, aligning with global demands for greener solutions.
Economic indicators further underscore the Kingdom’s progress. Foreign direct investment (FDI) reached $26 billion in 2024, a 12% increase from the previous year, signaling growing international confidence in Saudi Arabia’s reforms. The Kingdom’s Ease of Doing Business ranking has climbed to 38th globally in 2025, up from 62nd in 2020, reflecting a more investor-friendly environment driven by regulatory changes like the 2023 Civil Transactions Law, which enhances legal transparency. Stable economic metrics, such as an inflation rate of 2.3% and GDP growth of 2.7%, provide a solid foundation for continued growth, while the unemployment rate among Saudis has dropped to a decade-low of 3.5%, driven by Vision 2030’s Saudization policies that have increased private sector opportunities, particularly for women, whose workforce participation has risen to 36% from 20% in 2016.
As Saudi Arabia continues its ambitious journey under Vision 2030, I’ve compiled a detailed data sheet on the Kingdom’s economy using the latest available figures from Trading Economics, reflecting key indicators that highlight its growth and diversification efforts. With the non-oil sector now making up 54.8% of GDP, as recently noted by Economy Minister Faisal bin Fadhil Alibrahim, these metrics offer a clear view of Saudi Arabia’s economic landscape as of May 2025, providing valuable insights for investors and policymakers alike.
- Gross Domestic Product (GDP): $1,067.58 billion USD (2023). This represents 1.01% of the world economy, showcasing Saudi Arabia’s significant global economic presence despite its reliance on oil.
- GDP Annual Growth Rate: 2.70% (Q1 2025, year-over-year). This steady growth, driven by non-oil activities, reflects the Kingdom’s diversification efforts, with the non-oil sector expanding as a key economic driver.
- GDP Growth Rate (Quarterly): 0.90% (Q1 2025, compared to Q4 2024). While modest, this quarter-on-quarter growth indicates a stable economic trajectory amidst global uncertainties.
- GDP Per Capita: $23,331.77 USD (2023). Equivalent to 185% of the world’s average, this figure underscores the relatively high standard of living for Saudis, though disparities persist across demographics.
- Balance of Trade: Surplus of 24,563 SAR Million (January 2025). A positive trade balance highlights Saudi Arabia’s export strength, primarily driven by petroleum, despite efforts to diversify export categories.
- Inflation Rate: 2.3% (April 2025). This moderate inflation rate, paired with a specific increase in housing costs (6.8% in April 2025), indicates stable consumer prices but rising pressures in key sectors.
- Unemployment Rate: 3.5% (2025). A decade-low, reflecting Vision 2030’s success in creating jobs, particularly for Saudis, through Saudization policies and non-oil sector growth.
- Internet Penetration: 98% (2025). One of the highest rates globally, supporting the Kingdom’s digital economy and enabling initiatives like smart city projects and fintech adoption.
- Mobile Subscriptions: 120% (2025). Exceeding the population, this indicates widespread connectivity, crucial for digital payments (62% of transactions) and economic inclusion.
- Foreign Direct Investment (FDI): $26 billion (2024). Up 12% from the previous year, this growth signals increasing global confidence in Saudi Arabia’s economic reforms and diversification efforts.
- Non-Oil Sector Contribution to GDP: 54.8% (2025). A significant rise from 51% in 2024, driven by sectors like technology, tourism, and manufacturing, aligning with Vision 2030’s diversification goals.
- Digital Payments: 62% of transactions (2025). Up from 50% three years ago, this shift toward a cashless economy is supported by SAMA’s financial innovation sandbox and fintech growth.
- Ease of Doing Business Ranking: 38th globally (2025). Improved from 62nd in 2020, reflecting regulatory reforms like the 2023 Civil Transactions Law, making the Kingdom more investor-friendly.
This data sheet paints a picture of an economy that’s steadily diversifying, with the non-oil sector’s growth to 54.8% of GDP signaling a pivotal shift. The combination of low unemployment, high FDI, and robust digital infrastructure positions Saudi Arabia as a leader in economic transformation, though challenges like housing inflation and global oil price volatility remain areas to watch. I believe these figures highlight the Kingdom’s resilience and potential as a global economic powerhouse.
