Diversification in sight? A macroeconomic assessment of Saudi Arabia’s vision 2030

Abstract

Saudi Arabia, currently the world’s largest oil exporter, embarked since 2021 on a large-scale National Investment Strategy (NIS) designed to lift potential GDP growth by diversifying the economy. This article describes the strategy and is the first paper that quantifies its impact on growth using a dynamic general equilibrium model. It also decomposes this impact into two main channels: the direct impact of the investment push and the impact of complementary reforms. We find that the overall strategy – when supported by appropriate fiscal measures, labor supply reform, and higher public sector efficiency – could boost potential non-oil growth by 4.8 percentage points to about 8.8 percent in the medium term. We also assess the growth dividends of a wider range of alternative scenarios around the NIS baseline.