RIYADH: Saudi Arabia’s efforts to diversify its economy are yielding substantial results, with non-oil sectors now accounting for 52 percent of the country’s total economic activities. Furthermore, the number of foreign companies relocating their regional headquarters to Riyadh has risen to 600.
These statistics were shared by Saudi Investment Minister Khalid Al-Falih at the third PIF Private Sector Forum, which opened in Riyadh on Wednesday.
Al-Falih emphasized that the Kingdom’s economic transformation has been propelled by significant investment growth, with total investment in 2024 expected to reach SR1.2 trillion—almost double the investment levels prior to the launch of Vision 2030.
He further noted that by the end of 2024, Saudi Arabia’s economy is projected to reach SR4 trillion ($1.1 trillion).
“Last year was a very good year. In the private sector and investment domain in general, this is measured by fixed capital formation. Before Vision 2030, the annual rate was around SR642 billion, representing about 22 percent of GDP,” Al-Falih said.
He added: “The Saudi economy has surpassed an important milestone in its diversification journey. We’ve achieved 52 percent of economic activities being entirely non-oil. Even during years when oil-related activities were low due to the Kingdom’s usual production policies, the growth rate of non-oil activities remained steady at 4-6 percent.”
The minister highlighted the increasing role of the private sector in driving investments, noting that in the past, government and oil-related investments were the primary sources of capital inflows.
“In the past, most of the investment came from the government and the oil sector, Aramco and its investments,” Al-Falih explained.
He continued: “Around 72 percent of investments now come from other private sector industries. The fund (PIF) itself directly invests about 12-13 percent of total fixed capital formation, but it plays a crucial role in stimulating other investments.”
Al-Falih also pointed to international recognition of Saudi Arabia’s economic transformation, citing remarks from US President Donald Trump regarding the effectiveness of the PIF.
“Trump, the president of the world’s largest economy and the global leader most focused on economic and investment policy in his country, said that the first step within the first week or two would be to establish a sovereign wealth fund,” he noted.
Al-Falih continued: “The only fund he referenced was the PIF—not only because its returns and global impact are well known through bold initiatives, but also because the American president recognized that the Saudi economy has diversified and grown, making it an economy that investors worldwide are eager to engage with due to its unprecedented stimulative role.”
The minister also highlighted the improved attractiveness of Saudi Arabia as a business hub, with the number of registered investment licenses soaring from 4,000 in 2018-2019 to 40,000 today.
Al-Falih recalled a recent meeting with Nokia, where the company confirmed it would manage operations in 75 countries across Asia, the Middle East, and Africa from its regional headquarters in Riyadh.
“This hub will be connected to their largest global logistics center for product distribution, as well as a research and development center. In the future, we aspire for them to incorporate manufacturing into their operations,” he said.
Foreign investments in Saudi Arabia have surged significantly, with total foreign investment stock reaching SR900 billion—double the amount recorded at the launch of Vision 2030.
Al-Falih also observed that the annual inflow of foreign investments has tripled compared to pre-Vision 2030 levels.
He attributed these achievements to the Kingdom’s legislative improvements, noting that more than 800 regulatory reforms have been introduced to enhance the investment environment.
“With the integrated efforts of all entities, regulators, legislators, the Competitiveness Center, the Ministry of Investment, and others, more than 800 legislative improvements have been introduced, some minor and others fundamental and pivotal,” he said.
These reforms include, but are not limited to, the Civil Transactions Law, the Bankruptcy Law, and the new Companies Law.
Al-Falih underscored that Saudi Arabia’s leadership in digital and industrial transformation has also played a key role in attracting global investors.
“Today, in the Kingdom, the penetration rate of 5G and 6G networks, key drivers for attracting many companies into the heart of the Fourth Industrial Revolution, is double the average in G20 countries and major economic nations,” he stated.
The PIF Private Sector Forum continues to serve as a vital platform for businesses and investors to engage with Saudi Arabia’s evolving economic landscape, reinforcing the country’s commitment to long-term growth and diversification.
