A diverse economy with multiple income streams is a common goal among major nations.
The ambition is easier to identify than it is to achieve, especially when the global economy is still dealing with various shockwaves, from the impact of the first pandemic in a century to a spike in energy prices and fast-rising interest rates at major central banks.
Saudi Arabia has been reducing its reliance on oil as a source of income throughout this turmoil. The Kingdom’s steady approach to boosting alternative sources of income started when 85% of the state budget depended on oil.
Its Vision 2030 policies came in to cut that proportion significantly, in a world that was moving away from fossil fuels. Fresh numbers for the first quarter of 2023 from the Ministry of Finance show the extent to which the broad and detailed economic diversification programme is working.
A vision beyond oil dependence
The budget figures for the first quarter of this year show oil revenues have fallen – to 64% – meaning alternative sources of public revenues are up to 36%.
This sense of progress is backed up internationally. The general outlook from think-tanks and consultants for the Saudi economy is positive as the process continues, while the Kingdom’s major companies have strong credit ratings.
That comes as the private sector is taking on more and more of a role in economic diversification.