Saudi Arabia is showing confident progress in implementing its economic diversification program while achieving positive results in meeting its sustainable development goals. These conclusions are drawn from the latest economic report by PwC for the Kingdom.
An analysis conducted by PwC economists showed that Saudi Arabia has managed to increase the non-oil and gas portion of its economy by 3.8% year-on-year. This was made possible by a 4.9% growth in the private sector in the second quarter – the highest rate in a year. Key drivers of this growth were the trade and hospitality sectors, as well as positive trends in transport, communications, and financial and business services.
"Vision 2030": Saudi Arabia's Economic Diversification Strategy
Saudi Arabia's economic diversification strategy, known as "Vision 2030," aims to reduce the kingdom's dependence on oil and develop other sectors of the economy. Additionally, the program encourages investment in non-oil industries. Launched in 2016, this strategy is designed to transform the country's economy around three main goals: a prosperous economy, a dynamic society, and an ambitious nation.
Sustainable Development and Environmental Initiatives
The Kingdom is actively working to achieve its sustainable development goals while maintaining economic stability. As part of the green initiative, Saudi Arabia is striving to make business and industry more resilient by implementing measures to combat climate change and ensure sustainable use of ecology and natural resources.
PwC's report also highlighted Saudi Arabia's achievements in developing unconventional energy sources, particularly in the extraction of associated gas, which currently makes up half of the country's total gas production. Additionally, plans are in place to increase gas production at the Jafuri field, where production is set to begin in the third quarter of 2025. This will strengthen energy security and contribute to the energy transition.
Energy Transformation: Renewable Energy and Electric Vehicles
A key part of sustainable development is investing in renewable energy sources. As part of the National Renewable Energy Program, Saudi Arabia aims to produce 50% of its electricity from renewable sources by 2030. As of September 2024, 21 renewable energy projects totaling 19 GW have been contracted in the country. One such initiative is the 700 MW Al-Rass solar power plant, which was launched in August 2024 and is part of an ambitious plan to reach 130 GW by 2030.
The Kingdom is also investing in the development of electric vehicles (EVs). As part of this project, Saudi Arabia plans to create a hub in the King Abdullah Economic City, where 150,000 EVs will be produced by 2026, and 500,000 by 2030. Additionally, the infrastructure for electric vehicles will be expanded, including the installation of 5,000 fast-charging stations by 2030.
Expert Comments
Eryad Al Najjar, Chairman of PwC in the Middle East, said: "Saudi Arabia's transformational journey combines economic diversification with sustainable growth. This progress demonstrates the kingdom's ability to create new opportunities, stimulate innovation, and ensure a sustainable future for generations to come."
Faisal Alsaraj, Deputy Senior Partner of KSA in Ukraine, added: "Saudi Arabia's strategy for economic diversification and sustainable development demonstrates its adaptability and resilience. These efforts are paving the way for a greener future while also setting a benchmark for the global energy transition."