In the first quarter of 2025, Saudi Arabia’s economy showed impressive growth. It defied expectations and supported Vision 2030’s goals. Official data showed a 3.4% year-on-year GDP growth, surpassing the earlier estimate of 2.7%. This growth occurred despite a 0.5% contraction in the oil sector, highlighting the strength of the Kingdom’s non-oil economy.
At the core of this shift is the government’s Quality of Life (QoL) programme. This programme, key to Vision 2030, aims to diversify the economy away from oil.
In 2024, it launched 173 initiatives in tourism, culture, entertainment, and real estate. Remarkably, 85% of its performance indicators were either met or on track. As a result, non-oil GDP grew by about 3.9%, becoming the main driver of overall economic growth.
Saudi Arabia’s non-oil journey is more than just numbers; it reflects the country’s structural changes. Foreign direct investment (FDI) rose to USD 20.7 billion in the fourth quarter of 2024. This surge demonstrates investor confidence in sectors that were previously seen as minor.
The startup ecosystem doubled, supported by government programmes like Monsha’at and Fintech Saudi. This support has allowed an innovation-driven private sector to emerge.
Simultaneously, the financial sector is undergoing significant modernisation. Early 2025 saw the launch of Saudi Arabia’s first residential mortgage-backed securities. This move is key to creating liquid and diverse capital markets.
The Public Investment Fund (PIF) also supported the listing of Saudi bonds through the SPDR JPMorgan Saudi Arabia Aggregate Bond ETF in Europe. This marks a significant step in internationalising Saudi financial assets.
Mega-projects under “Vision 2030,” which were often viewed skeptically, are now becoming economic drivers. The Red Sea resort cluster has opened five of its planned 25 luxury destinations. Sindalah Island in NEOM launched in late 2024, promising 3,500 new jobs and 2,400 daily visitors by 2028.
Soudah Peaks, a USD 7.7 billion mountain resort, aims to attract two million visitors annually by 2033 and add USD 7.8 billion to GDP. The Jeddah Central and Rua Al-Madinah projects will inject tens of billions into the economy and create over 100,000 new jobs combined.
The country’s demographics, with a median age of just 26.6 years, are another advantage. In 2024, 364,000 Saudis joined the workforce, helping the government meet youth unemployment targets six years early. This demographic boost is vital for Vision 2030’s success, as the government focuses on upskilling young citizens to meet private sector needs.
However, challenges remain. Despite strong GDP growth, Saudi Arabia is facing a significant fiscal deficit, estimated at USD 27 billion (101 billion riyals) for 2025. With oil prices around USD 60 per barrel—well below the estimated breakeven point of USD 90—public finances are under pressure.
The IMF warns that maintaining the current pace of change will require careful fiscal management.
To address this, the Kingdom plans to adjust its public spending. It will prioritise ongoing Vision 2030 projects while cutting back on less critical ones. Balancing investment-driven growth with fiscal sustainability will shape the Kingdom’s economic path in the coming years.
Overall, the outlook remains positive. Saudi Arabia is shifting from a petrostate to a diversified economic powerhouse. The strong performance of the non-oil sector, rising international investment, and progress in megaprojects suggest that Vision 2030 is more than just a plan—it is a functioning engine of national renewal.
Saudi Arabia’s Q1 2025 GDP growth story showcases ambition matched with real results. It reflects a broader transformation—of policy, purpose, and people. Vision 2030 is now in a crucial phase where execution will shape its legacy.
With strengthening economic fundamentals, modern financial tools, and young talent stepping up, the Kingdom is moving into the future not solely with oil but with innovation, ambition, and resilience leading the way.