Saudi Arabia Set to Maintain Robust Non-Oil Growth as Vision 2030 Diversification Gains Pace

Saudi Arabia’s non-oil economy is expected to sustain annual growth of between 4.5 percent and 5.5 percent over the next decade, supported by ongoing diversification efforts under Vision 2030, according to a new forecast by Moody’s Investors Service.

The global rating agency attributed the Kingdom’s strong medium-term outlook to continued expansion in services, tourism, and major events such as the 2027 AFC Asian Cup, the 2030 World Expo in Riyadh, and the 2034 FIFA World Cup. These initiatives, Moody’s said, are helping attract sustained private investment and reinforce non-oil momentum.

Other institutions share a similar view. Fitch Ratings projects Saudi Arabia’s non-oil economy to grow by an average of 4.5 percent in the coming years, while consultancies BMI and Strategic Gears forecast solid gains in tourism, exports, and private-sector participation.

The Ministry of Finance, in its latest pre-budget statement issued on September 30, forecast overall GDP growth of 4.4 percent in 2025 and 4.6 percent in 2026, driven by a five percent rise in non-oil activities supported by strong domestic demand, rising employment, and expanding private investment.

Moody’s noted that the Kingdom’s services sector would continue to benefit from large-scale projects gradually entering the commercialization phase. However, the agency also highlighted uneven progress across some flagship developments due to engineering challenges, supply constraints, and tighter funding conditions.

Despite expected moderation in oil prices, Saudi authorities are likely to maintain high levels of diversification spending, leading to moderate fiscal deficits and government debt rising to around 36 percent of GDP by 2030, up from 26 percent at the end of 2024.

In a separate report, Moody’s pointed to strong credit demand linked to Vision 2030 projects and housing finance, which has pushed the banking sector’s loan-to-deposit ratio above 100 percent for the first time since 2021. Saudi banks, it said, have diversified into capital market issuances and syndicated loans, with total issuance reaching SR56 billion ($14.9 billion) in 2024.

The Saudi Central Bank has introduced measures to strengthen financial resilience, including a 100-basis-point countercyclical capital buffer effective in 2026. Meanwhile, the Saudi Real Estate Refinance Co. has expanded its portfolio to about four percent of the mortgage market and recently launched the Kingdom’s first residential mortgage-backed security.

Moody’s also expects cumulative private-sector investments of about SR8 trillion by 2030 to sustain non-oil growth, with the Public Investment Fund (PIF) playing a pivotal role. The agency projects PIF investments to reach SR1 trillion by 2030, on top of SR642 billion over the past five years.

The utilities sector is set for some of the largest capital outlays as Saudi Arabia targets a 50/50 energy mix between renewables and gas by 2030. Investments in the sector are estimated to reach SR750 billion from 2019 to 2030, with around SR440 billion already committed.

Overall, Moody’s expects continued progress under Vision 2030 to deepen Saudi Arabia’s capital markets, diversify funding channels, and underpin long-term economic resilience beyond oil.