## Saudi Arabia's Economy Grows as it Diversifies

_IMF News, September 28, 2023_

## Source details

**Canonical URL:** [Saudi Arabia's Economy Grows as it Diversifies](https://www.imf.org/en/news/articles/2023/09/28/cf-saudi-arabias-economy-grows-as-it-diversifies)

## Other formats

- [Markdown version](/en/news/articles/2023/09/28/cf-saudi-arabias-economy-grows-as-it-diversifies/index.md)
- [Structured JSON version](/en/news/articles/2023/09/28/cf-saudi-arabias-economy-grows-as-it-diversifies/index.json)
- [Bundle manifest](/en/news/articles/2023/09/28/cf-saudi-arabias-economy-grows-as-it-diversifies/bundle-manifest.json)

## Bibliographic details
- Authors: Amine Mati, Sidra Rehman September
- Published: September 28, 2023

---

### Recent performance and drivers
- Saudi Arabia is implementing reforms to reduce oil dependence, diversify income sources, and enhance competitiveness.
- 2023 marks the midpoint of Saudi Arabia’s Vision 2030 journey.
- Non-oil growth has accelerated since 2021, averaging 4.8 percent in 2022.
- Despite lower overall growth reflecting additional oil production cuts, non-oil growth "will remain close to 5 percent in 2023," spurred by strong domestic demand.
- Diversification has been driven by improvements in the regulatory and business environment.
- New investment deals and licenses grew by 95 percent and 267 percent in 2022, respectively.
- The Saudi Investment Fund (PIF) has been deploying capital, including to help stimulate private sector investment.

### Key challenges and considerations
- Ensuring large projects generate returns and boost productivity is vital for sustained economic growth and further diversification.
- There is a need to foster a more conducive environment for innovation and to invest in workforce skills that complement the diversification agenda.
- Streamlining fees and taxes faced by businesses—particularly at local and city levels—will further boost private sector development.
- The PIF’s growing role in the economy should continue to stimulate private sector investment.
- Rigorous monitoring and evaluation can help minimize risks from targeted interventions and industrial policies, ensuring these policies (which are not a substitute for broader structural reforms) attain the intended benefits.

### Policy recommendations and priorities
- Pursue sound macroeconomic policies and maintain the reform momentum, irrespective of developments in oil markets.
- Continue reforms that improve the regulatory and business environment to support entrepreneurship and investor protection.
- Support private non-oil investment through policy measures that reduce the costs of doing business.
- Focus public efforts on maximizing returns and productivity gains from large projects.
- Enhance innovation ecosystems and workforce skills aligned with diversification objectives.
- Streamline subnational fees and taxes to lower barriers for businesses.
- Apply rigorous monitoring and evaluation to targeted interventions and industrial policies to ensure effectiveness.

*Amine Mati is an Assistant Director and Sidra Rehman is an Economist. Both are in the IMF’s Middle East and Central Asia Department.*

---


## References

- [SAUDI ARABIA AND THE IMF](https://www.imf.org/en/Countries/SAU)
- [STAFF REPORT](https://www.imf.org/en/Publications/CR/Issues/2023/09/05/Saudi-Arabia-2023-Article-IV-Consultation-Press-Release-Staff-Report-and-Informational-Annex-538823)
- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [https://www.imf.org/en/publications/weo](https://www.imf.org/en/publications/weo)
- [Global Economy in Crosscurrents of War and Technology](https://www.imf.org/en/publications/weo/issues/2026/07/08/world-economic-outlook-update-july-2026)
- [https://www.imf.org/en/publications/gfsr](https://www.imf.org/en/publications/gfsr)
- [Global Financial Markets Confront the War in the Middle East and Amplification Risks](https://www.imf.org/en/publications/gfsr/issues/2026/04/14/global-financial-stability-report-april-2026)
- [https://www.imf.org/en/publications/fm](https://www.imf.org/en/publications/fm)
- [Fiscal Policy under Pressure: High Debt, Rising Risks](https://www.imf.org/en/publications/fm/issues/2026/04/15/fiscal-monitor-april-2026)
- [https://www.imf.org/en/publications/reo](https://www.imf.org/en/publications/reo)
- [Asia and Pacific](https://www.imf.org/en/publications/reo/apac)
- [Europe](https://www.imf.org/en/publications/reo/eu)
- [Middle East and Central Asia](https://www.imf.org/en/publications/reo/meca)
- [Sub-Saharan Africa](https://www.imf.org/en/publications/reo/ssa)
- [Western Hemisphere](https://www.imf.org/en/publications/reo/wh)
- [https://www.imf.org/en/publications/areb](https://www.imf.org/en/publications/areb)
- [Getting to Growth in an Age of Uncertainty](https://www.imf.org/en/publications/areb/issues/2025/09/24/annual-report-2025)
- [More Publications](https://www.imf.org/en/publications)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2023/09/28/cf-saudi-arabias-economy-grows-as-it-diversifies_