Economic transformation in Saudi Arabia is ongoing. The government is implementing wide-ranging reforms to diversify the economy away from oil. These reforms are based on substantive changes to the regulatory, legal, and fiscal frameworks. They are supported by considerable public sector investment in infrastructure, new economic sectors, and the development of “giga” projects such as Neom. These reforms are bearing fruit. The Saudi non-oil economy has continued to grow robustly, inflation is contained, and the unemployment rate for Saudi nationals is at an all-time low. Further, the participation of Saudi women in the labor market has doubled, tourist arrivals have increased strongly, and government fiscal revenue and exports have become more diversified.

Despite these successes, key questions remain about the reforms. Is there sufficient capacity to implement projects on the scale envisaged by the government? Can the reforms be financed, particularly if oil revenue comes under downward pressure? Will increased foreign investment materialize? Will efforts by other Gulf countries to diversify their economies help or hinder the reforms in Saudi Arabia?

AGSIW was pleased to host a discussion, based on the International Monetary Fund’s recently released 2024 Article IV report, on Saudi Arabia’s reforms and the prospects for its economy.