Saudi Arabia’s abundant natural resources and young population are key factors driving its economic growth, according to BlackRock Investment Institute.
In its latest report, BlackRock emphasized Saudi Arabia’s potential to attract global investments and diversify its economy successfully. The report highlighted opportunities across public and private markets, but noted that success depends on governance, regulatory improvements, and labor market reforms.
The Kingdom is advancing Vision 2030, an ambitious plan to reduce oil dependency and boost the non-oil private sector. BlackRock noted that Saudi Arabia has reduced unemployment among nationals to 7.1% by mid-2024, with significant declines in joblessness among Saudi women.
Leveraging Natural Wealth and Investment
Saudi Arabia’s estimated $3 trillion in mineral resources forms a cornerstone of its diversification plans. Vision 2030 aims to establish mining as the Kingdom’s third economic pillar. BlackRock pointed out that the country benefits from low debt levels, a young workforce, and substantial energy resources, which foster long-term growth and infrastructure development.
According to the report, Saudi Arabia has invested $780 billion over the past three years, supported by public spending and a bank lending boom. IPO activity in the Kingdom raised $2.1 billion in the first half of 2024, reflecting a 141% annual increase.
Building a Global Investment Hub
The Kingdom’s National Investment Strategy targets $3.3 trillion over the next decade, spanning sectors like energy, healthcare, and tourism. Programs like Shareek, launched in 2021, aim to contribute $1.3 trillion, representing 40% of Vision 2030’s total investment goal.
BlackRock emphasized that regulatory reforms—such as simplifying licensing, enhancing transparency, and safeguarding investor rights—are crucial to attracting foreign direct investments. The report also highlighted regional stability as vital for investor confidence.
Balancing Oil Dependency and Renewable Energy
While Saudi Arabia remains reliant on oil revenues, it aims to strengthen its low-cost production capabilities and diversify energy exports. BlackRock noted that the Kingdom is transitioning power generation to an equal mix of oil and renewables by 2030. Investments in solar energy, carbon capture, and hydrogen production are enhancing energy security and reducing emissions.
Despite challenges linked to oil market volatility and geopolitical tensions, Saudi Arabia’s reforms and investments position it as a rising economic powerhouse. BlackRock’s analysis underscores the Kingdom’s focus on sustainability, innovation, and regional leadership to secure its economic future.
