SAUDI ARABIA Trends and Developments Contributed by: Zain Satardien, Chadi Hourani and Hayel Hourani, Hourani & Partners
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Key Economic Developments Saudi Arabia is undergoing a profound economic transformation under its Vision 2030 plan. The reform agenda seeks to diversify the Kingdom’s economy by fostering growth in non-oil sectors, enhancing for - eign direct investment (FDI), and modernising various industries. Non-oil GDP is projected to sustain robust growth, averaging 4.4% annually from 2025 onwards. The Kingdom has made substantial progress in diver - sifying its economy. The government’s commitment to large-scale infrastructure projects continues to require substantial foreign investment. Initiatives in education, healthcare, and artificial intelligence (AI) are expected to further enhance economic output, with AI projected to add USD135 billion by 2030. Saudi Arabia’s suc - cessful bid to host Expo 2030 and the FIFA World Cup 2034 presents further opportunities for foreign inves - tors, as the country seeks to showcase its economic transformation and attract global participation. Saudi Arabia’s economic transition is also increas - ingly supported by regulatory modernisation and targeted investor-incentive programmes. The expan - sion of special economic zones (SEZs), refinement of the Regional Headquarters (RHQ) Programme, and accelerated digital transformation initiatives aim to strengthen market accessibility and reduced administrative barriers for foreign entrants. These programmes aim to integrate tax incentives, customs and logistics efficiencies, immigration facilitation, and
simplified licensing pathways, enabling Saudi Arabia to compete more directly with global investment hubs. The non-oil sector has shown significant growth and focus in the following key areas. • Infrastructure and Smart Cities: Projects such as NEOM, the Red Sea Project, Qiddiya, New Murab - ba and the Line are attracting large-scale invest - ments. These initiatives focus on sustainability, innovation, and creating hubs for tourism, technol - ogy, and luxury living. • Technology and the Digital Economy: Saudi Ara - bia’s digital sector now contributes 14% to GDP. The government’s emphasis on AI aims to add USD135 billion to the economy by 2030. Initia - tives like the FintechHub and LogiHub are further enhancing entrepreneurial capacity and innovation. • Tourism Expansion: As part of Vision 2030, Saudi Arabia is targeting 100 million visitors annually by 2030, supported by projects in both religious and luxury tourism. Saudi Arabia’s GDP grew by 3.7% in 2023 and is fore - cast by the World Bank to have grown at 2.5% in 2024, while inflation remained steady at 2%, under - scoring effective monetary and fiscal measures. The IMF also projects a rebound in oil GDP by 2026, driv - en by global demand recovery. Concurrently, a 26% rise in acquisitions of machinery and transportation equipment contributed to the sustained increase in imports. The Saudi Arabian Central Bank’s net foreign
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