The Arab world’s largest economy launched the 2030 vision programme in 2016 to diversify its economy away from oil, improve female workforce participation, boost non-oil revenue and reduce the unemployment rate among Saudi citizens.
“Midway through the Vision 2030 implementation, strong performance has been achieved against many of the economic goals,” the report said.
One of the 14 targets that has already been far exceeded is that of female workforce participation on the part of Saudi women, the report said.
Female workforce participation among citizens surged to 35 per cent in the second quarter of 2023, topping the 2030 target of 30 per cent, supported by social liberalisation, including the move to permit women to drive in 2018 and “Saudisation” policies.
It was only 22 per cent, one of the lowest in the world around 2015, the baseline level used for assessing the performance of various economic goals drafted as part of the Vision 2030 initiative.
“There’s been a proactive shift among nationals to embrace a broader spectrum of roles, including customer-facing retail and service positions,” the report said.
“The boost to household incomes from working women has contributed to rising consumption and supported broader economic growth.”
Unemployment levels among Saudis has also been declining, hitting 8 per cent in the fourth quarter of 2022, the lowest on record, down from the baseline of 11.6 per cent around 2015 and well on the way towards the 2030 target of 7 per cent.
Another area of strong performance is the expansion of Saudi home ownership, which stood at 47 per cent in the baseline but had risen to 67 per cent by 2022. This is higher than the US and France, excluding expatriates.
“These strong results can be attributed to a range of initiatives to boost the supply of affordable homes, including a tax on undeveloped urban land and improved access to finance, with the 2030 target of 70 per cent now close to being achieved,” the report said.
Economic diversification initiatives are also bearing fruit, owing to the commitment of the public sector to major non-oil investments.
Non-oil revenue has grown by two and a half times the baseline, increasing from $163 billion to $411 billion in 2022, and expected to rise further by 11 per cent this year.
Saudi Arabia is focusing on developing the property and tourism sectors, as well as industry, as part of the diversification plans. It is building projects such as the $500 billion Neom project along the Red Sea coast.
Saudi Arabia's economy expanded by 1.2 per cent in the second quarter of this year, a slightly faster pace of growth than the initial estimates, driven by a sharp expansion in the non-oil sector.
Gross domestic product at current prices was 970 billion Saudi riyals ($258.66 billion) in the three months to the end of June, according to the General Authority for Statistics.
The non-oil sector grew by 6.1 per cent on an annual basis, beating the authority's initial estimate of a 5.5 per cent expansion in the three-month period to the end of June.
Saudi Arabia’s GDP exceeded $1 trillion for the first time in 2022 as its economy continues to recover from the coronavirus pandemic, the PwC report said.
The International Monetary Fund forecasts that the kingdom can reach $1.3 trillion in fiscal revenue by the end of 2028.
“The ongoing success of these economic initiatives has resulted in Saudi Arabia rising to 17th place in the global economy rankings, with the largest by size of GDP in 2022. It is now targeting 15th place by the end of this year,” PwC said.
The transformation of the Public Investment Fund from a small holding company to an international dealmaker and manager of mega projects, has been one of the biggest successes of the diversification strategy, PwC said.
“[The] PIF is on track to achieve its ambitious target to increase assets under management by more than tenfold, having already increased by nearly fivefold to $773 billion by the end of 2022,” the report said.
This is partly a result of the transfer of state assets, including a 4 per cent stake in Aramco in 2022 and proceeds from the sale of 1.7 per cent in the 2019 IPO, according to PwC. A further 4 per cent has been transferred in 2023.
It is also due to an increase in valuation in its Saudi corporate holdings, with the Tadawul bourse being one of the strongest performing global markets recently, as well as some foreign investments including from Lucid Group.
“The kingdom, as a whole, is making good progress towards achieving Vision 2030, with areas of focus including non-oil diversification, improving infrastructure, advancing digitalisation, fostering a competitive business environment and ensuring good jobs for its citizens through nationalisation targets,” said Riyadh AlNajjar, PwC's Middle East chairman of the board and senior partner in Saudi Arabia.
“The kingdom's ambitious initiatives are shaping the foundation of the new Saudi economy, which will have a transformative effect on the business environment in the region.”
Saudi Arabia’s mega projects such as the Red Sea Project, Qiddiya entertainment city, outside Riyadh and the Diriyah Gate heritage development “have made significant progress in the last few years, moving from the conceptual phase to construction”, the report said.
The dominant mega project, Neom, has achieved “significant earthworks progress” it said.
“To date, the bulk of investment in Neom has come from PIF but private investments are expected to play a leading role as its physical infrastructure and regulatory framework matures,” PwC said.
Originally named Duba Port, it will meet rising volumes of cargo arriving at Neom, the country's city of the future.