Strong growth forecast for Saudi economy

According to researchers, economic diversification would make the Kingdom’s economy more resilient to external demand shocks and help to create higher-skilled jobs. (File)
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Updated 25 April 2021
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Strong growth forecast for Saudi economy

  • Contribution of all sectors to GDP to significantly increase by 2030

RIYADH: Economists forecast that the Saudi economy will grow significantly bigger over the coming decade with the size of every sector expected to increase.

The Kingdom’s finance, insurance, real estate and business sectors are likely to expand by 9 percent annually and their relative share to overall economic activity will grow by 12.7 percent.

A paper titled “Economic Diversification Under Saudi Vision 2030: Sectoral Changes Aiming at Sustainable Growth,” published by the King Abdullah Petroleum Studies and Research Center (KAPSARC), discussed the macroeconomic and structural transformation of the Saudi economy under the Vision 2030 program.

KASPARC’s researchers in the energy and macroeconomic programs, David Havrlant and Abdulelah Darandary, explained that economic diversification would make the Kingdom’s economy more resilient to external demand shocks, help to create higher-skilled jobs, and establish a knowledge-based economy.

Havrlant said that the research findings showed that the relative share of the Kingdom’s wholesale and retail trade, restaurants and hotel sectors to the gross domestic product (GDP) was expected to reach 16 percent by 2030, followed by transport, storage and communication.

HIGHLIGHTS

● The Kingdom’s finance, insurance, real estate and business sectors are likely to expand by 9 percent annually.

● The relative share of the wholesale and retail trade, restaurants and hotel sectors to GDP was expected to reach 16 percent by 2030.

● The services sector is expected to grow about 10 percent annually on average.

“The continued growth in the basic oil and gas sector is expected to become somewhat milder than the rapid expansion of the diversification focal sectors,” he said.

Meanwhile, the services sector is expected to grow about 10 percent annually on average, implying that its relative GDP share will climb to almost 40 percent in 2030.

Darandary said that the manufacturing and services sectors would become one of the strongest pillars of sustainable economic growth and lead the diversification process.

“The main thing that changes is the way the economy is segmented, letting the initially tiny sectors increase their share in comparison with the larger ones. The relative sizes of the economic sectors will be more evenly distributed, yielding a more diversified economy,” he said.

The researchers said that as the economy transformed into a more advanced and diversified one, the private sector was set to take the lead, being the carrier of high-level knowledge and skills, innovative capabilities, and research and development.

Household income and private consumption are expected to benefit from these adjustments, with private consumption likely to account for more than 40 percent of overall expenditure in 2030, they said.


Artificial intelligence is transitioning into a ‘digital employee’

Updated 27 February 2026
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Artificial intelligence is transitioning into a ‘digital employee’

  • AI can be an effective tool, business leaders tell Arab News
  • Not about jobs, but ‘convergence of human capital and AI’

RIYADH:  Artificial intelligence is fundamentally reshaping the world of work, transitioning from a supporting tool to an active partner that is radically changing the nature of professions and productivity standards.

Amidst the current global transformations, an active regional digital environment is emerging.

This is being led by Saudi Arabia through Vision 2030 and massive investments in smart infrastructure, providing a living model for studying the implications of this partnership between humans and machines on the future of work in the region.

Arab News spoke to various business leaders about the emerging shape of the sector.

Salem Bagami, co-founder of Metatalent, said the ideal relationship between humans and machines at work should be complementary and collaborative.

Humans would bring creativity, emotional intelligence, and complex decision-making, while machines excel at processing big data and performing repetitive, precise tasks.

He believes that this type of balanced partnership would lead to unprecedented productivity and innovation.

While machines excel at processing big data and performing repetitive, precise tasks, humans would bring creativity, emotional intelligence, and complex decision-making. (Supplied)

Mohammad Al-Jallad, chief technologist and director at HPE, said AI has gone beyond being merely an executive tool to becoming a “digital employee” entrusted with automating routine tasks and providing insights based on data analysis.

He believes that the real opportunity lies not in the debate over job replacement, but in “the convergence of human capital and artificial intelligence.”

AI should augment human teams by taking on menial and routine tasks, enabling employees to focus on critical thinking, creativity, and ethical reasoning, significantly improving operational results.

Bagami also emphasized the complementary nature of this partnership. “The ideal relationship between humans and machines at work is one of collaboration, where each complements the others.”

He explained that humans bring creativity, emotional intelligence, and nuanced decision-making, while machines excel at processing big data and performing repetitive tasks efficiently, leading to increased productivity and innovation.

Opinion

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Salem Alanazi, chairman of Jathwa Technology Co., notes a significant trend among Saudi Arabia companies toward using AI applications to provide faster services to customers at lower costs.

The emergence of the “virtual employee” available around the clock has eliminated the need for some traditional jobs in specific sectors.

Alanazi warns that some companies’ reluctance to adopt AI may expose them to real risks. “All those who hesitated to benefit from AI applications have a lack of understanding of these technologies.”

He said those who adopt these technologies will be able to offer lower-cost, higher-quality services, which will affect the market position of companies that lag behind.

Ali Aljumhour, CEO of VALUE Consultancy, said that the transition of AI into a partner has reshaped the list of most in-demand skills in the job market.

Skills such as “prompt engineering,” “human-machine integration,” and “digital ethics” are becoming increasingly important.

He added that AI has become an instantly available “technical knowledge base,” shifting the criteria for professional distinction toward those capable of smart interaction with these technologies.

In terms of ethics, transparency, and trust, Alanazi points to the complexities of global AI governance, where legislation overlaps and evolves rapidly to keep pace with potential risks, particularly in the areas of cybersecurity and privacy.

Ali Aljumhour, CEO of VALUE Consultancy. (Supplied)

Al-Jallad emphasizes this crucial dimension, noting that providing responsible and reliable AI solutions that meet the highest standards of transparency is a key priority, especially in regulated sectors.

Bagami believes there should be basic standards for the ethical use of Al, emphasizing the need for transparency, accountability, and fairness, along with using diverse data sets to prevent bias and protect privacy.

He believes that building trust between humans and machines requires clear explanations of how systems work, giving users the opportunity to provide feedback and conducting periodic performance reviews.

On performance evaluation, Aljumhour said: “I expect radical changes in standards, shifting from measuring individual effort to evaluating the quality of the partnership between humans and machines.”

There should be a focus on the quality of inputs provided to intelligent systems, the accuracy of review and modification, and complex decision-making based on outputs.

He warns, however, of new risks that may arise, such as over-reliance on AI or difficulty in determining responsibility for mistakes.

In the employment sector, Aljumhour expects fundamental changes in standards.

There will be questions and tests focusing on measuring skills in dealing with AI, such as asking candidates about their experiences of collaborating with these systems, or testing their ability to formulate effective requests for complex tasks.

Aljumhour identifies significant human challenges in this transition, with “fear, loss of power, and exclusivity of knowledge” being the biggest concerns for experienced employees.