International
Saudi Arabia’s GDP to Grow by 3.7% in 2025, Driven by Non-Oil Sector and Vision 2030 Investments
Saudi Arabia’s gross domestic product (GDP) is forecast to grow by 3.7% in 2025, outpacing the projected global average of 3.2%, according to an analysis by the Mastercard Economics Institute
The Kingdom’s growth will be fueled by robust non-oil economic activities and continued investments aligned with Vision 2030.
The report highlights Saudi Arabia’s economic diversification efforts, aimed at reducing reliance on oil revenues, as a key factor in the country’s sustained economic expansion. The projected growth surpasses that of major global economies, including the US, Germany, Japan, the UK, France, and Australia.
“With robust non-oil economic activity and continued investments aligned with Vision 2030, Saudi Arabia is set to maintain its strong growth trajectory, outpacing global markets,” said Khatija Haque, Chief Economist at Mastercard for Eastern Europe, Middle East, and Africa. She emphasized that economic reforms and diversification will solidify Saudi Arabia’s position as a regional economic driver in 2025.
Complementing this outlook, the International Monetary Fund (IMF) and S&P Global have also projected strong GDP growth for Saudi Arabia in 2025. The IMF estimates a 4.6% expansion, while S&P anticipates a 5.3% increase, reinforcing confidence in the Kingdom’s economic resilience and diversification strategies.
Inflation and Consumer Spending
Saudi Arabia’s inflation is expected to remain stable at 2% in 2025, one of the lowest rates in the Middle East and globally. Consumer spending in the Kingdom is projected to grow by 4.5%, supported by lower interest rates, increased private sector investments, and employment growth.
The Mastercard report noted that Saudi Arabia’s ability to stabilize inflation reflects effective government measures to mitigate global price pressures. In comparison, global inflation is expected to average 3.2% in 2025, according to the report.
Economic Drivers: Female Workforce and Population Growth
Saudi Arabia’s growing population and rising female workforce participation are identified as essential drivers of economic activity. Between 2019 and 2023, net migration contributed 4.9% to the country’s population growth, enhancing human capital and boosting private consumption.
The participation of women in the workforce has surged, supported by Vision 2030 reforms and flexible work policies. According to the World Bank, women’s representation in the Saudi workforce increased from 18% in 2017 to 34.5% in 2023. The Kingdom now aims to achieve 40% female workforce participation by 2030, surpassing its initial target of 30%.
“Women’s labor force participation reflects job creation in sectors such as health care and education, coupled with the rise of remote work that enables greater flexibility for working mothers,” the report stated.
Regional and Global Outlook
Regionally, the report highlights tourism as a growth driver for Gulf Cooperation Council (GCC) economies, with the region positioned as one of the fastest-growing global travel destinations. The UAE is forecast to see GDP growth of 5% in 2025, with inflation averaging 2.5%.
Globally, India is expected to record a 6.6% GDP growth in 2025, while the US and the UK are projected to grow by 2.3% and 1.2%, respectively. Other advanced economies, including Germany, France, and Italy, will see more modest expansions, ranging from 0.6% to 0.8%.
Saudi Arabia’s strong economic outlook, supported by Vision 2030 investments, rising private sector activity, and demographic shifts, positions the Kingdom as a key contributor to global and regional economic growth in the coming years.
