Assessing Saudi Arabia’s Vision 2030 progress

Reuters

In April 2016, Saudi Arabia launched its Vision 2030 agenda. This gave the kingdom a scant 14 years to achieve a series of ambitious development goals.

Now, at the halfway point, is a good time to look at progress of the Vision 2030 programme.

In our recently launched Saudi Economy Watch, PwC highlighted the growth of the non-oil private sector, increased expenditure, higher levels of home ownership and female participation in the workforce, and aspects of religious tourism. 

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Notably, the non-oil private sector is becoming a driving force in the kingdom’s economic transformation, reflecting the success of its diversification efforts.

Non-oil revenues more than doubled from SAR163 billion to SAR411 billion in 2022, and are expected to increase by 11 percent this year. With continued dedication, the ambitious target of SAR 1 trillion in non-oil revenue can be achieved. 

The progress made in non-oil fiscal revenue is a testament to Saudi Arabia’s resilience and vision.

The successful implementation of revenue sources such as VAT, excise tax and white land tax (levied on undeveloped land previously designated for residential or commercial use), in tandem with the region’s rapid economic growth, have significantly increased revenue generation.

This represents year-on-year growth of 5.8 percent in the second quarter of 2023 – 13.9 percent higher than in 2019. However, it is important to acknowledge that the growth rate subsequently slowed to 3.8 percent year on year, reflecting the dynamic nature of economic fluctuations.

The oil sector has also contracted by 4.3 percent year on year as the kingdom has sought to balance global markets and ensure stability.

Expanding the workforce and home ownership

Another development we highlighted is the significant increase of female participation in the workforce. This reached 36 percent in the first quarter of 2023, surpassing the target of 30 percent set for 2030.

This progress is an outcome of Saudi Arabia’s ongoing efforts to empower women by providing them with opportunities to play an integral part in the society.

It is also encouraging to see higher levels of home ownership. This stood at just 47 percent in the baseline but had risen to 67 percent by 2022. The kingdom is now closing in on its 2030 target of 70 percent home ownership.

This surge highlights the government’s commitment to improving access to affordable housing, a crucial aspect in enhancing citizens’ quality of life and promoting social stability.

As Saudi Arabia’s GDP has surpassed $1 trillion, the International Monetary Fund Executive Board recently acknowledged the Vision 2030 project’s progress. It praised the “ongoing economic transformation, supported by commendable reforms under the Vision 2030 agenda”.

Looking ahead, the IMF projects that the Saudi economy could grow to $1.3 trillion by the end of 2028. This ambitious outlook reflects the kingdom’s determination to continue on a path of sustainable economic development, diversification and long-term financial stability. 

Riyadh Al Najjar is Middle East chairman of the board and Saudi Arabia senior partner at PwC