RIYADH — Minister of Economy Faisal Al-Ibrahim said that Saudi Arabia seeks to achieve optimal economic diversification. Addressing the Budget 2024 Forum session titled “Sustainable Finance” in Riyadh on Thursday, he said that specific industries and investments are creating opportunities for the private sector.
Al-Ibrahim said that the Kingdom’s Vision 2030 created a fertile environment for economic diversification, building national capabilities and raising the efficiency of government institutions, in addition to improving the trade balance. He underlined the need to support the private sector to reach the government target, which is to constitute 65 percent of the gross domestic product (GDP).
He also stressed that all sectoral strategies and mega projects aimed to enable the private sector to exploit available opportunities and grow to respond to demand within the Kingdom and also compete with other producers outside Saudi Arabia. As a result of the mechanisms put in place by the government so far, Al-Ibrahim revealed that the link of the non-oil economy to government spending decreased from 99 percent in 2015 to 50 percent this year, indicating the impact of the mechanisms on the Kingdom’s path towards achieving economic diversification.
Al-Ibrahim pointed out that s exports of services rose to SR135 billion currently, compared to SR65 billion in 2016, which contributed to improving the Kingdom’s trade balance. The contribution of non-oil revenues to covering costs jumped from 19 percent to 35 percent, which is due to the basic growth of the non-oil economy, he said while noting that unemployment rates continue to decline systematically.
Al-Ibrahim stressed that Saudi Arabia is leading the global energy transition file with regard to climate change, as the Kingdom is working on this in a systematic, logical and practical manner. “Riyadh’s victory in winning the candidacy for Expo 2030 reflects the Kingdom’s bilateral and international institutional capabilities,” he added.
Al-Ibrahim said the tourism sector and related sectors witnessed significant growth in the past year. “Before the coronavirus pandemic, we witnessed growth in financial services as a result of the solutions provided in the real estate sector. After coronavirus, we witnessed growth in investment, when the Kingdom achieved the highest growth in investment among the G20 countries,” he said while noting that the tourism sector grew approximately 132 percent in the first half of this year compared to the same period last year.
The minister also referred to the industrial sector, which also gives the Kingdom the ability to produce highly complex products. “The industrial sector is very important.” He said that specific investments in certain sectors in turn create diversification for the private sector, such as the Kingdom’s investment in electric cars and cars in general and attracting investments in them, as well as in shipbuilding, military industries, electronic sports, and others.
Read the full article here