IMF says Saudi Arabia's reliance on oil revenues sees sharp fall

The Kingdom of Saudi Arabia's flag

Amine Mati, the International Monetary Fund's (IMF) Mission Chief for Saudi Arabia, said the Kingdom has significantly downscaled its dependency on oil revenues over the past decade.

Currently, the main challenge facing Saudi Arabia is to ensure the effective deployment of non-oil revenues, hence reduce its oil reliance in tandem with spend control to support the path of its economic diversification, he addressed Argaam during a press conference on the 2025 Article IV Consultation.

Implementing Saudi Vision 2030 remains pivotal to achieving the goals economic diversification and attracting foreign direct investment, regardless of oil price fluctuations, he further stated.

Mati also pointed out that the recent regulatory reforms in Saudi Arabia, including amendments to the investment and civil transactions laws, are bound to boost private sector participation and increase investor confidence.

He stressed the importance of being more transparent and credible with investors in terms of economic and fiscal policies.

The Saudi government reviewed and adjusted its fiscal plans last year to eliminate chances of an overheated economy and developed medium-term spending plans that are pegged to oil price fluctuations, said Mati.

He hailed this veracity and called for holding onto such an approach to provide regular announcements that reassure investors and reduce uncertainty.

Mati further stated that domestic demand will likely remain a key driver of economic growth, expecting continued strong consumption and a faster pace of investment, especially as the Kingdom prepares to host major international events such as the Expo, the Asian Games, and the World Cup.

He added that investment grew by 6.3% in 2024, noting that, despite being lower than previous years, it remains at strong levels.

The services and manufacturing sectors are poised to hold on to their positive performance going forward, according to the official.