Over the past few years, Saudi Arabia’s economy has struggled with a slowdown due to budget challenges and oil production cuts. In 2023, its economy contracted to 0.8% following extended oil production cuts among the OPEC+ member states, of which Saudi Arabia is a top member, which continues to weigh on GDP growth, Reuters reports.

Whit it matters: Saudi Arabia’s plan to restore and diversify their economy, Vision 2030, has taken effect and the results are showing.

Vision 2030 was launched in 2016 under the leadership of the Custodian of the Two Holy Mosques to diversify Saudi Arabia’s economy, empower its citizens, position the country as a global leader and create a vibrant environment for local and international investors.

The plan is structured in stages, each spanning five years and building upon the progress of the previous phase. The first phase focuses on structural reforms across the public sector, economy and society. The second phase emphasizes strategic focus and further investments in key sectors and ambitious projects. The final phase aims to sustain the transformation’s impact and capitalize on new growth opportunities.

One critical component of Vision 2030 aims to generate employment opportunities for Saudis to strengthen the labor market and improve the economy. This proved successful when Saudi Arabia’s unemployment rate for nationals reached 7% in the fourth quarter of 2024, marking a decrease of 0.8% points compared to both the previous quarter and the same period last year, according to the General Authority for Statistics.

Signs of economic growth started to show in 2024, when Saudi Arabia’s gross domestic product (GDP) growth surged to 4.4% in the fourth quarter versus the same period a year earlier, revealed a General Authority for Statistics report, the highest quarterly growth rate in two years, with non-oil activity increasing 4.6%. Real GDP increased to 1.3% compared to the previous year, preliminary government data released on Thursday showed, with non-oil sector activities lifting overall GDP.

Despite its improvements, Saudi Arabia’s economy is hindered by oil dependency, high youth unemployment, fiscal sustainability challenges and fluctuating oil revenues. Its partnership with the United States to stabilize the Middle East makes the country vulnerable to global downturns and geopolitical tensions, all of which can have a significant impact on Saudi’s economy.

The bottom line: Saudi Arabia remains committed to their economic reform plans. With Vision Realization Programs (VRPs), comprehensive national strategies and significant projects, Vision 2030 has improved the quality of life for Saudi Arabia’s citizens and residents by expanding opportunities for growth, fostering greater global integration and enhancing governmental efficiency.

Customers in Saudi Arabia have averaged 27 days beyond terms, with 67% saying payment delays have stayed the same, according to the FCIB Credit and Collections Survey. The most common causes for payment delays are customer payment policy (80%) and unwillingness to pay (60%). “It’s important to stay engaged with your customer,” a survey respondent wrote.