The impact of economic diversification under Saudi Arabia's Vision 2030 on its GDP

Abstract

This study explores the impact of economic diversification initiatives under Saudi Arabia's Vision 2030 on the country's Gross Domestic Product (GDP). Launched in 2016, Vision 2030 aims to reduce Saudi Arabia's reliance on oil by diversifying its economic base through the development of non-oil sectors such as manufacturing, energy, and services. This research utilizes data from the General Authority for Statistics, spanning from 2011 to 2023, to assess changes in the GDP composition and growth patterns. Additionally, it incorporates comparative data from the International Monetary Fund (IMF) for other GCC countries to evaluate Saudi Arabia's performance relative to its regional peers. Employing a comprehensive econometric analysis, which includes multiple regression models and this comparative perspective, the study examines the contributions of various sectors to GDP growth and evaluates the effectiveness of the government's strategic policies in facilitating economic diversification. The findings indicate that non-oil sectors have increasingly contributed to GDP, with manufacturing emerging as a key driver, thus highlighting a successful shift towards a more diversified economic structure. This shift has significant implications for other oil-dependent economies considering similar diversification strategies