Saudi Arabia has officially entered the third and final phase of its Vision 2030 transformation programme, beginning the 2026-to-2030 period with an economy that has grown substantially beyond its 2016 baseline. The Kingdom’s real GDP reached SR4.9 trillion ($1.31 trillion) by the close of 2025, representing a structural shift in the composition and scale of the Saudi economy that few observers predicted when the vision was first announced a decade ago.
Non-oil activities now account for 55 per cent of GDP — a significant milestone for a country where hydrocarbons once dominated economic output. The shift reflects years of sustained investment in entertainment, tourism, logistics, manufacturing, and financial services, alongside consistent government pressure on the private sector to absorb Saudi nationals who were previously concentrated in public sector employment.
Tourism Target Exceeded Three Years Early
One of the most striking achievements of the vision’s second phase has been tourism. Saudi Arabia reached 123 million visitors by the end of 2025, surpassing the original 2030 target of 100 million visitors with three years to spare. Total tourism spending exceeded SR300 billion ($80 billion), prompting authorities to revise the 2030 target upward to 150 million visitors.
The tourism boom has been driven by a combination of factors: the opening of NEOM’s first residential and commercial districts, the rapid development of the Red Sea Project’s resort infrastructure, Riyadh’s emergence as a major entertainment and business destination, and the continued draw of religious tourism to Mecca and Medina, which has seen pilgrimage capacity expanded significantly.
FDI Growth Tells the Investment Story
Foreign direct investment has been one of the clearest external signals of Saudi Arabia’s transformation. FDI inflows rose fivefold over the vision period, climbing from SR28 billion ($7.5 billion) in 2017 to SR133 billion ($35.5 billion) in 2025. More than 700 international companies have established regional headquarters in Saudi Arabia — many of them attracted by the government’s Regional Headquarters (RHQ) programme, which requires companies seeking government contracts to be headquartered in the Kingdom.
The Public Investment Fund (PIF), the sovereign wealth fund that has served as the principal vehicle for Vision 2030 investment, has had its 2026-2030 strategy approved by its Board of Directors. The revised strategy focuses on maximising financial returns and increasing private sector participation — a shift that reflects PIF’s evolution from a domestic enabler into a globally-oriented investment institution with a growing portfolio of international assets.
Competitive Standing Improves
Saudi Arabia’s progress has been recognised in international competitiveness rankings. The Kingdom climbed more than 20 places in the IMD World Competitiveness Ranking to reach 17th globally — a significant achievement for an economy that was ranked outside the top 25 for much of the previous decade. Saudi Arabia and the UAE also outperformed the United States and United Kingdom in the World Happiness Report 2026, reflecting improvements in quality of life, safety, and economic opportunity for residents.
What the Final Phase Focuses On
The third phase of Vision 2030 — covering 2026 through 2030 — will prioritise three objectives: accelerating delivery on projects that are already underway, adapting the vision’s priorities to reflect evolving global conditions, and consolidating long-term gains to ensure they survive any change in the commodity cycle or geopolitical environment.
Key focus areas include completing the physical infrastructure of major giga-projects, deepening the local content requirements in procurement to embed Saudi participation in the supply chain, and expanding the social and educational reforms that have increased female workforce participation and broadened opportunities for young Saudis entering a changed labour market.
Fiscal Challenges Remain
The achievements of Vision 2030 come against a backdrop of ongoing fiscal pressure. Saudi Arabia’s budget deficit is anticipated to widen to around 5.6 per cent of GDP in 2026, reflecting the cost of continuing to fund large-scale infrastructure spending even as oil revenues face headwinds from global energy transition pressures and periodic OPEC+ production constraints. Riyadh has signalled its intention to maintain development spending as a priority, relying on domestic debt issuance and PIF dividends to manage the gap.
