Saudi Arabia’s economy is on the upswing. Recent forecasts have raised expectations International Monetary Fund (IMF) has upgraded the 2025 growth forecast to 3.5%. Meanwhile, World Bank has also lifted its growth projection to 3.8% for 2025, citing renewed momentum in both oil and non-oil sectors.
Government data shows that non‑oil activities which have been at the center of the country’s diversification efforts are holding up well, helping cushion the economy even when oil prices remain soft.
Growth in non‑oil activities remains robust, driven by expanding domestic demand, investments, and increased foreign and private sector participation.
Big Budget Moves: Investing in the Future
To sustain this growth trajectory, Saudi leadership has approved an ambitious budget for the coming year. The approved 2026 budget plans for spending of about 1.31 trillion riyals (~ US$350 billion), even while dealing with fiscal challenges tied to global oil price fluctuations.
This budget supports vast national and infrastructure projects aligned with the long-term strategy of economic diversification and growth. Government spending including on public services, infrastructure, and investments is seen as fuel for growth beyond hydrocarbons.
The move indicates that even in a world of volatile commodity prices, Saudi Arabia is doubling down on building a diversified and resilient economy.
Non‑Oil Surge: The New Engine of Growth
One of the most significant developments is the growing weight of non‑oil sectors in the economy. The shift away from oil dependency once seen as a lofty, long-term objective is now showing concrete results. Non‑oil GDP growth remains a mainstay.
Private‑sector activity is picking up: businesses are seeing stronger demand, hiring is up, and spending is rising. This signals renewed corporate confidence and suggests that the private sector is increasingly driving growth not just oil companies or government‑backed entities.
With non‑oil exports rising and imports growing as domestic demand strengthens, trade patterns are evolving. This suggests a broader base of economic activity covering services, manufacturing, trade, and investments beyond traditional oil trade.
Challenges Remain But With Hope
Despite strong growth and diversification, there are headwinds. Lower global oil prices and fluctuating international demand continue to place stresses on fiscal balances and public revenues.
The government’s hefty spending also means larger deficits and increased public debt decisions taken now might pay off, but they carry risks if global conditions turn sour.
Still, strong buffers including structural reforms, non‑oil growth momentum, and active investment give the kingdom a reasonable shot at navigating global uncertainties.
What It Means For Saudi Arabia and the World
Saudi Arabia is no longer just an oil‑dependent economy. Thanks to structural reforms, aggressive diversification policies, and bold investment decisions, the Kingdom is transforming.
For global investors and businesses, this shift signals opportunity. With non‑oil sectors gaining strength, Saudi Arabia becomes a more stable and diversified investment destination.
For Saudis, this could mean broader employment options, improved public services, and sustained economic growth even if oil prices remain volatile.
In short: Saudi Arabia is reinventing itself. Its economy is growing, evolving, and preparing for a future beyond oil and the signs now are more powerful than ever
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