Saudi Arabia is entering a new phase of its Vision 2030 agenda, with greater emphasis on consolidating and maximising the impact of economic reforms introduced over the past decade. Since the launch of Vision 2030 in 2016, the Kingdom has pursued an ambitious agenda aimed at diversifying away from hydrocarbons, expanding private sector activity across the economy and positioning the Kingdom as a globally competitive investment destination. The transformation is being driven by a coordinated institutional framework led by the Council for Economic Development Affairs, with implementation spanning key government entities – the Saudi Central Bank (SAMA) and the Public Investment Fund (PIF). Together, these entities have enabled policy rollout, mobilised capital and implemented far-reaching regulatory reform across key areas of the economy.
While oil continues to play a central role in the Kingdom’s finances, the underlying structure of the economy has shifted markedly. Non-oil sectors now account for a majority of GDP, supported by sustained investment in target sectors and rising consumption. International investor confidence is also on the up, underpinned by legislative modernisation, targeted investment incentives and continued macroeconomic credibility. Together this is sustaining the reforming momentum of Vision 2030 and laying important groundwork for the next stage of the Kingdom’s economic journey.
Structure & Oversight
Saudi Arabia is a hereditary monarchy governed under the authority of King Salman bin Abdulaziz Al Saud. Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud serves as the country’s prime minister and oversees large areas of economic development and policy. Policy direction is coordinated through the Council of Ministers and the Council for Economic Development Affairs (CEDA), which is chaired by the crown prince and is the authority responsible for strategic oversight and implementation of the country’s far-reaching development blueprint, Vision 2030. Additionally, CEDA oversees the National Centre for Privatisation, which is tasked with regulating and implementing Saudi Arabia’s privatisation programme as outlined in Vision 2030, and which is largely steered and governed by a private sector participation law that came into effect in March 2021.
Governance
Economic administration involves several of the Kingdom’s key ministries, including the Ministry of Finance (MoF), the Ministry of Economy and Planning (MEP), the Ministry of Investment (MISA), SAMA and the PIF. SAMA is the Kingdom’s primary financial authority and its mandate covers monetary policy, banking supervision, payment infrastructure and managing the foreign currency reserves. SAMA plays a key role under Vision 2030 as it works to implement modernisation and digitisation drives across the sector, as well as support the Kingdom’s private credit expansion. A central policy pillar for the central bank is the long-standing currency peg, with the Saudi riyal pegged to the US dollar at $1:SR3.75, requiring SAMA to broadly track US Federal Reserve policy when adjusting domestic interest rates. Ayman Al Sayari serves as SAMA’s governor and has been in position since February 2023.
The MoF is responsible for preparing the annual government budget, as well as allocating spending across all ministries and Vision 2030 programmes. In addition, it manages the Kingdom’s fiscal policies and is responsible for revenue collections and sovereign debt management. As of January 2026 it was headed by Mohammed Al Jadaan, who has served as the minister of finance since 2016.
The MEP is headed by Faisal Al Ibrahim, and is responsible for leading all national development planning and long-term economic strategies. It is an important player in delivering Vision 2030, coordinating policy across ministries, and providing up-to-date economic data and sector-specific analytics and reports. Elsewhere, MISA is responsible for developing a reliable, robust and business-friendly ecosystem that allows international investors to capitalise on the economic opportunities of Vision 2030.
Asset Strength
The PIF is Saudi Arabia’s sovereign wealth fund and is an important vehicle for the Kingdom’s long-term economic transformation goals laid out in Vision 2030. With approximately $1trn assets under management and more than 220 portfolio firms spanning 13 strategic sectors, the PIF is responsible for directing strategic capital to economic sectors and mega-projects that underpin the ambitions of Vision 2030. Governance of the PIF stems from the board of directors, which is chaired by Crown Prince Mohammed bin Salman, with other members of the Council of Ministers also serving on the board, including the minister of commerce, the minister of finance and the minister of investment.
Legislative Reform
Regulatory reform is a central pillar of Saudi Arabia’s push to bolster the economy’s international competitiveness and accelerate private investment. A major legislative change in 2025 was the introduction of the 2024 Investment Law, which took effect from February 2025. The new law removes the requirement for foreign shareholders in Saudi companies to hold a foreign investment licence and instead mandates simple registration with MISA. The law is intended to harmonise treatment of local and foreign investors, expand the range of incentives that are available to international investors and also provide access to alternative dispute resolution mechanisms.
Another initiative introduced as part of Vision 2030 goals is the Regional Headquarters Programme (RHQP), introduced in 2021 and which came into effect in January 2024. RHQP requires foreign companies with overseas operations above SR1m ($267,000) to establish a regional headquarters in Saudi Arabia in order to be eligible for government procurement contracts. The incentives for the programme include 0% withholding tax for 30 years and 30-year corporate income tax exemption for regionally headquartered licensed firms.
In 2023 two new pieces of important legislation were enacted: the new Civil Transactions Law and the New Companies Law. The former represents the first comprehensive civil code in Saudi Arabia and covers contracts, obligation, property rights and dispute-related principles in the Kingdom – aligning Saudi practice with internationally recognised standards. The latter introduces a simplified corporate governance framework, including simplified joint-stock companies, which support venture capital and entrepreneurial ecosystems by lowering governance and capital barriers and increasing flexibility in company formation and growth.
Vision 2030
Saudi Arabia’s long-standing and longterm economic goals prioritise economic diversification away from oil, increased levels of private sector activity in the economy and attracting greater foreign direct investment (FDI). Under Vision 2030, the country is accelerating towards these goals, with the government aiming to raise levels of FDI and deepen economic activity in the non-oil sector, in areas such as manufacturing, logistics, services, tourism and technology. The roadmap revolves around three pillars: a vibrant society, a thriving economy and an ambitious country.
As a result of the targets of the economic blueprint, Saudi Arabia’s economic structure shifted markedly between 2016 and 2025. The non-oil sector accounted for 55.6% of GDP in the first half of 2025, up from 45.4% in 2016. The non-oil sector saw a 40% increase in private investment’s share of GDP over the same period. Tourism is one of the plan’s flagship non-oil target areas, with a stated goal of contributing 10% of GDP by 2030 and attracting 150m domestic and international visitors per year by 2030. This target has been revised upwards since the Kingdom achieved its initial target of 100m in 2024.
Vision 2030 progress is apparent across the board. According to the Vision 2030 report, published in 2025, 85% of the programme’s initiatives were either complete or on track, 93% of key performance indicators were meeting or exceeding their targets. As of 2024 women’s participation in the workforce had exceeded the 30% target, reaching 33.5%, inbound tourism had risen from 17.5m before the launch of the programme to 29.7m by 2024 and domestic trips climbed from 47.8m to 86.2m. “With labour force participation rising across demographics, including a notable increase in women’s participation and overall employment rates, human resources strategy is now central to economic diversification and business performance,” Abdulrahman Al Mohaimid, CEO of Abdal HR, told OBG. “Organisations that leverage flexible talent solutions and data-driven workforce planning are better positioned in navigating skill shortages and competing in a rapidly evolving job market.”
In the 2026 budget, the officials signalled that Vision 2030 had entered its third phase, with a shift in focus from launching economic reforms to maximising their impact. The budget aims to accelerate the pace of progress and boost growth opportunities to achieve sustainable impact beyond 2030. The PIF has moved to refocus spending away from giga-projects towards sectors including logistics, minerals, artificial intelligence, urban development, advanced manufacturing, industry, clean energy, renewable infrastructure and religious tourism.
Performance
After slowing in 2024, Saudi Arabia’s growth is expected to tick up again in 2025, with the IMF forecasting growth of 3%, up from 1.3% the previous year. In line with Vision 2030 objectives, non-oil based activity continues to expand, with the IMF projecting non-oil real GDP growth of 3.4% in 2025, down from 4.3% on 2024 figures. Oil and natural gas activities accounted for 22.3% of Saudi Arabia’s GDP in 2024. This is forecast to increase slightly in 2025 due to higher oil output.
Extensions to the production cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and other allied oil-producing nations, known as OPEC+, in 2024 and the first 10 months of 2025 kept oil output at 9m barrels per day (bpd), the lowest level since 2011. In November 2025 the group agreed to gradually boost production, with an increase of approximately 137,000 bpd, or 41,000 barrels for Saudi Arabia. As of November 2025 the group had agreed to pause production increases in the first quarter of 2026 amid fears of a supply glut if sanctions against Russia were relaxed.
The year 2024 marked a notable period for non-oil activity contribution to GDP, accounting for 51% of the total, up from 50% in 2023. This growth is being driven primarily by private consumption and non-oil private investment with the retail, hospitality and construction sectors leading growth. “Over the past two to three years, we have seen a significant transformation in consumer habits across the region,” Adnan Al-Khalaf, CEO of Lazurde, told OBG. “Lifestyle adjustments, changing preferences, immigration effects and broader retail drivers have all created pressure on the consumer wallet, leading to a clear shift in how people evaluate and prioritise their purchases.” Government activities (16.2%) was the second-biggest GDP contributor in 2024 after oil and natural gas activities (22.3%). Wholesale and retail trade, restaurants and hotels comprised 10.3%, manufacturing (excluding petroleum refining) made up 9.1% and real estate activities contributed 6.5% of GDP.
Inflation was estimated at approximately 2-2.5% in 2025. High real interest rates, coupled with declining prices for the transport and communications sectors, kept inflation relatively low. In addition, real wages remained stable, with some increases in the highly skilled segment. “Digital transformation is reshaping private consumption, determining how customers choose, finance and manage purchases such as vehicles,” Hazm Sami Jamjoom, CEO of the Automotive Sector of Taajeer Group, told OBG. “End-to-end digital platforms and data analytics are helping us deliver faster approvals, predictive maintenance and a smarter mobility experience.”
In 2025 all three of the major credit ratings agencies upgraded or approved Saudi Arabia’s international credit rating, with each emphasising the country’s continued progress towards diversification goals and non-oil based growth. In March 2025 ratings agency Standard & Poor’s upgraded the Kingdom’s long term sovereign credit rating from “A” to “A+” with a stable outlook. Moody’s ratings agency, meanwhile, maintained Saudi Arabia’s credit rating at “Aa3” with a stable outlook in December 2025 and Fitch Ratings affirmed the country’s sovereign rating at “A+” with a stable outlook.
Budget
Saudi Arabia unveiled its approved budget for the 2026 fiscal year in December 2025, with the MoF maintaining the expansionary spending policy of recent years, placing an emphasis on both strategic projects and essential services. The MoF estimated the Kingdom’s 2026 fiscal deficit will narrow to SR165bn ($44bn), down from SR245bn ($65.3bn) in 2025. Total revenue for 2026 is projected to exceed SR1.1trn ($293.3bn) while expenditure is forecast at over SR1.3trn ($346.6bn). These figures equate to a 5.1% increase in revenue and a 1.7% decline in spending compared to 2025. Assumptions on oil prices are not disclosed, but taking into account OPEC+ production, analysis by the Arab Gulf States Institute estimates the budget is based on an oil price of $72 per barrel. Based on this, oil revenue would be 4.5% higher in 2026 than 2025. Non-oil revenue is budgeted to increase by 5% in 2026.
In line with recent trends, health and social development was allocated the largest share of public spending with 19.7% of the total, equivalent to SR259bn ($69bn). The other largest allocations are military spending with SR240bn ($64bn), general items with SR236bn ($62.9bn) and education with SR202bn ($53.9bn). General items covers expenditure including government contributions to retirement pensions and social insurance, public debt servicing, budget stabilisation reserves and contributions to international organisations. In addition, it also includes support for government facilities, government subsidies and emergency allocations.
Tax Framework
While Saudi Arabia does not have a personal income tax, it does have several standing tax frameworks. A 20% corporate tax applies to foreign-owned companies and certain non-residents. Local and GCC national entities pay zakat (a payment under Islamic law that is used for charitable or religious purposes) at a 2.5% rate rather than a standard corporate tax. Zakat is administered by the Zakat, Tax and Customs Authority. Between 2020 and 2025 value-added tax (VAT) was levied at a rate of 15%, as well as excise taxes that were applied on specific goods, which includes tobacco and sugary drinks (see Tax chapter).
Oil revenue totalled SR301.5bn ($80.4bn) in the first half of 2025, while non-oil revenue stood at SR263.7bn ($70.3bn). A large portion of non-oil revenue was generated by multiple tax streams, such as taxes on income, profit and capital gains, with SR20.4bn ($5.4bn); VAT and excise on goods and services, with SR146.5bn ($39.1bn); and taxes on global trade and transactions, with SR11.9bn ($3.2bn).
Trade
Saudi Arabia’s balance of trade is typically positive, mainly driven by hydrocarbons exports, with the surplus fluctuating in line with moving oil prices, production volumes and global demand. In 2023 exports of goods totalled SR1.2trn ($320bn) against imports of SR776bn ($212bn). Service exports, meanwhile, totalled $52bn compared to $93bn imported in 2023. Oil and petroleum products dominate the Kingdom’s goods export category, although non-oil products such as chemicals and plastics also feature, while re-exports are also rising rapidly. Re-export figures from 2024 posted 205% growth over 2016, when Vision 2030 was launched, driven primarily by the re-export of mobile phones, which reached a record value of SR25bn ($6.7bn). In 2024 exports reached SR1.1trn ($305.5bn) and imports totalled SR873bn ($232.8bn). Exports for the first nine months of 2025 were SR864.4bn ($230.5bn) and imports SR702.4bn ($187.3bn), according to preliminary data from the General Authority for Statistics.
In 2024 China was Saudi Arabia’s largest export market, accounting for 15.2% of the total, followed by South Korea, Japan and India at 9.4%, 9.3% and 8.9%, respectively. Other important export destinations include the UAE, the US, Poland and Bahrain, with the top-10 export markets accounting for two-thirds of total exports. China also leads as the Kingdom’s main source of imports, accounting for 23.9% of the total, followed by the US with 8.4%, the UAE with 5.5% and India with 5.4%. Other significant import partners include Germany, Japan, Italy, Egypt and Switzerland.
Saudi Arabia has been a member of the World Trade Organisation since 2005. This provides a trade policy framework on tariffs, services trade and dispute settlement. The country participates in global trade agreements through the GCC. Deals include the GCC free trade agreement (FTA) with the European Free Trade Association for the reduction of tariffs on many products, the GCC-Singapore FTA that covers tariff reduction and elimination, and the Major Arab Free Trade Area which delivers liberalised trade among Arab League members. Saudi Arabia is also a member of the GCC Customs union, allowing for the free movement of goods among member countries with a common external tariff.
Saudi Arabia does not have an FTA with the US and, as such Saudi exports were subject to the sweeping tariff measures introduced by the US in 2025. However, the tariff does not apply to crude oil exports, refined petroleum products or natural gas, which were exempted under the move. The two countries have a trade and investment framework agreement in place. This agreement establishes a bilateral consultative mechanism to address trade and investment issues, promote cooperation and help resolve any trade barriers that may arise.
In November 2025 during Crown Prince Mohammed bin Salman’s visit to the White House, the US and Saudi governments agreed to increase engagement on trade issues, such as reducing non-trade barriers, aligning standards and improving the investment environment for businesses from both countries. In addition, the two signed a framework agreement on critical minerals cooperation, indicating strategic collaboration in supply chains for industrial minerals. Separately, in May 2025 during US President Donald Trump’s visit to the Kingdom, Saudi Arabia announced a $600bn procurement and trade expansion in the US across sectors including energy security, defence, technology, health care and infrastructure, strengthening economic ties beyond trade flows.
Investment
FDI into Saudi Arabia posted strong results in 2024, with the volume of inflows continuing to expand in line with Vision 2030 directives. These aim to raise FDI to around 5.7% of GDP by 2030, or roughly $100bn. In 2024 Saudi Arabia’s FDI inflows reached SR119.2bn ($31.8bn), up 23% on 2023 numbers, while initial results for 2025 indicate that there is a continued upwards trajectory, with net inflows in the second quarter of 2025 reaching SR22.8bn ($6.1bn), up 14.5% year-on-year.
In 2024 the US led the way in net new investment into the Kingdom, contributing SR11bn ($2.9bn). The US was followed by the UAE with SR9bn ($2.4bn), France with SR4bn ($1.1bn) and the Netherlands with a net inflow of SR2bn ($533.2m). Meanwhile, in terms of FDI stock – the total accumulated value of FDI in the Kingdom as opposed to new investment – the UAE, Luxembourg and France led the way with a cumulative FDI stock in the country of SR161bn ($4.3bn), SR101bn ($26.9bn) and SR69bn ($18.4bn), respectively, as of the end of 2024.
A core aspect of Saudi Arabia’s international investment strategy is the range of special economic zones (SEZs) located in the Kingdom. In April 2023 the latest wave of SEZs began operations specifically as part of Vision 2030 goals and launched under Saudi Arabia’s new SEZ framework under the Economic Cities and Special Zones Authority. The largest of these by size is the King Abdullah Economic City located in Makkah Province on the Red Sea coast.
Covering an area of approximately 60 sq km and built around the King Abdullah Port, the zone focuses on a range of goods and sectors including automotive supply chain and assembly, consumer goods, ICT and light electronics manufacturing, pharmaceuticals, medical technology and general logistics. Incentives for companies looking to set up in the zone include 5% corporate income tax for up to 20 years, 0% withholding tax and 0% VAT for eligible intra-SEZ goods. The other economic zones include the Jazan SEZ, which focuses on industrial production and exports; the Ras Al Khair SEZ, which focuses on maritime and industries; and the Cloud Computing SEZ, located in Riyadh, with a focus on cloud, data and digital technology solutions. “Saudi Arabia’s trade and investment landscape is rapidly maturing as reforms and strategic incentives attract international capital into non-oil industries such as technology, renewables and advanced manufacturing, underpinned by Vision 2030’s diversification agenda,” Muhammad Alkhalil, executive chairman of FAD Investments, told OBG. “Broadening investor participation and unlocking sectoral value chains are key to deepening economic resilience and expanding the Kingdom’s role in global commerce.”
Outlook
The near- to medium-term outlook for Saudi Arabia is broadly positive, with growth expected to re-accelerate as oil output rises in 2026 and non-oil activity continues to expand. Economic policy is increasingly focused on maximising the impact of reforms and projects already in place rather than launching new initiatives. The Kingdom’s fiscal policy remains supportive but more disciplined, with spending priorities shifting towards productivity-enhancing sectors and essential services.
Continued progress on economic diversification, privatisation and international investment targets is expected to further deepen private sector participation across the economy and drive foreign capital inflows, while sovereign ratings upgrades and affirmations in recent years will reinforce international confidence in the Kingdom’s policy direction. Although exposure to global energy markets presents a degree of risk to its large-scale projects, Saudi Arabia is increasingly well positioned to sustain the diversified growth of recent years and continue to deliver the economic benefits of Vision 2030.
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