Moody’s has forecasted robust growth in Saudi Arabia’s non-oil economy from 2025 to 2027, driven by economic diversification initiatives and significant projects associated with Vision 2030.
The credit ratings agency anticipates that the real growth rate of non-oil GDP will range between 5.0 percent and 5.5 percent during this period, in contrast to an average of 4.6 percent observed in 2022-2023 and just 1.5 percent from 2017 to 2019.
Additionally, Moody’s expects government expenditure to remain elevated, fluctuating between 30 percent and 32 percent of GDP over the next three years, which will further stimulate non-oil economic growth.
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However, Moody’s cautioned that a decline in oil prices or reduced production could pose fiscal challenges, potentially prompting Saudi Arabia to streamline spending or enhance non-oil revenue streams. The agency also projected a moderate fiscal deficit of 2.5 percent to 3.0 percent of GDP for 2025-2027, with public debt expected to rise gradually, reaching roughly 32 percent of GDP by 2027. Moreover, Moody’s highlighted the Public Investment Fund’s critical role in financing economic diversification projects to alleviate risks associated with falling oil prices.
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