RIYADH: Saudi Arabia’s non-oil private sector is leading in growth for 2023, having accelerated to 5.8 percent year-on-year (y/y) in Q2 2023 and standing 13.9 percent higher than in 2019. In contrast, growth in the non-oil government sector slowed to 3.8 percent (y/y), while the oil sector contracted by -4.3 percent (y/y) due to production cuts, according to PwC’s inaugural Saudi Economy Watch report. It said Saudi GDP exceeded $1 trillion, with strong progress towards meeting its Vision 2030 targets in multiple areas.
The report reviews the kingdom’s ongoing performance across several economic targets at the midpoint towards achieving Vision 2030’s transformative impact on society and the economy. This positive outcome is attributed to strong investment from the private and public sectors, non-oil revenue growth, ongoing diversification, and economic resilience efforts. The report indicates notably strong performance on multiple targets.
Female workforce participation has surged to 36 percent in Q1 2023, already ahead of the 2030 target of 30 percent, supported by social liberalization and Saudization policies. The resulting boost to household incomes has been a critical factor in rising consumption, supporting broader economic growth.
Homeownership among Saudi nationals expanded from a baseline of 47 percent to 67 percent - scoring higher than the US and France. These strong results can be attributed to a range of initiatives to boost the supply of affordable homes, including a tax on undeveloped urban land and improved access to finance, with the 2030 target of 70 percent now close to being achieved.
Economic diversification initiatives are bearing fruit, owing to the commitment of the public sector to major non-oil investments, it said.
The transformation of the Public Investment Fund (PIF), from a small holding company to international dealmaker and manager of giga projects, has been one of the biggest successes of the diversification strategy. PIF is on track to achieve its ambitious target to increase assets under management by more than 10-fold, having already increased by nearly five-fold to $773 billion by the end of 2022.
The Kingdom’s ambitious initiatives are shaping the foundation of the new Saudi economy which will have a transformative effect on the business environment in the region.
The report highlights that the kingdom has quickly secured the recovery of the non-oil sector post-COVID, even in the hardest-hit sectors of hospitality, transportation and retail and wholesale trade. As a result, Saudi GDP exceeded $1 trillion for the first time in 2022. — Agencies