KUALA LUMPUR, Sept 23 (Bernama) — Despite energy and trade market uncertainties, as well as rising regional shipping and insurance costs due to conflicts and wars in West Asia, Saudi Arabia’s non-oil sector continues to demonstrate resilience, reflecting a broadening economic base and increasingly diversified growth drivers.
A decade after Saudi Arabia launched its Vision 2030, rising investment, tourism, employment and private sector participation indicators point to significant progress in building a more diversified economy that is better prepared to withstand global changes.
The country’s Arabic-language local newspaper portal, “Al-Nahar”, reported that on the eve of Saudi Arabia’s National Day on Sept 23, 2026, the government had already embarked on one of the most extensive economic transformations in the country’s modern history.
The significance of the changes was highlighted by data for the second quarter of 2026, which showed real Gross Domestic Product (GDP) contracting 4.7 per cent year-on-year, driven by a 24.8 per cent decline in oil activities.
However, non-oil activities and government activities each grew by 0.9 per cent, helping to cushion the impact of lower oil prices on the overall economy.
Economic diversification does not mean abandoning oil, which will remain an important strategic resource, source of revenue and investment.
Instead, it aims to leverage oil revenues and government expertise to create new sectors, expand employment opportunities and strengthen economic capacity for growth across various sectors.
The Saudi economy entered 2026 on a strong footing, having expanded 4.6 per cent in 2025. According to the Saudi Vision 2030 report, the non-oil sector accounted for about 55 per cent of GDP, recording growth of 4.9 per cent, while the private sector’s contribution rose to around 51 per cent.
The results of the transformation are evident in sectors that now play a more prominent role in the economic landscape.
In the second quarter of 2026, community, social and personal services grew 4.1 per cent year-on-year, while financial, insurance and business services expanded 3.3 per cent.
This indicates that sources of growth are no longer limited to energy and major government projects, but now encompass financial, professional and social services, as well as activities directly related to the lives of residents and businesses.
This diversification allows for a broader distribution of economic activity while creating new opportunities for investors, entrepreneurs and small and medium enterprises (SMEs), in line with the development of digital and logistics infrastructure.
The tourism sector provides a clear example of the expansion of the new economy, recording about 123 million domestic and international tourist visits in 2025, including 29.3 million international visits and 93.3 million domestic visits.
Total tourism expenditure reached SAR303.7 billion (about US$81 billion), with SAR176.6 billion (about US$47.1 billion) spent by inbound visitors and SAR127.1 billion (about US$33.9 billion) by domestic tourists.
The economic value of tourism extends beyond visitor spending, benefiting hotels, restaurants, airlines, transport, retail businesses, events, culture and entertainment.
This interconnectedness helps create jobs, stimulate businesses and distribute the benefits of growth across Saudi Arabia.
The transformation is also evident in the labour market, with the unemployment rate among Saudi nationals falling from 12.3 per cent in 2016 to 7.2 per cent by the end of 2025, approaching the Vision 2030 target of 7 per cent.
This reflects the expansion of employment opportunities, greater participation by Saudi nationals in the private sector and the growth of sectors that were previously not major sources of employment.
Saudi Arabia is entering its next phase with a broader economic foundation, as its policies seek to boost corporate productivity, develop value-added exports, expand manufacturing and technology, empower SMEs and increase private capital participation in projects.
The world’s major oil producer is, in effect, not building separate sectors around the oil economy, but rather seeking to transform its financial, human and geographical capabilities into an interconnected economic system.
It is no longer about the diversification that has already begun, but about accelerating its outcomes and ensuring their sustainability.
With continued investment in human capital, infrastructure and technology, the Saudi government appears increasingly closer to achieving a diversified economy that combines the strength of the energy sector with growing opportunities in tourism, industry, services and innovation.
— BERNAMA