How Saudi economy came out of the pandemic in 2021: Year in Review

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Updated 05 January 2022
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How Saudi economy came out of the pandemic in 2021: Year in Review

  • Vaccination campaigns rolled out in the Kingdom and across the world drove its key oil exports

RIYADH: The Saudi economy recovered in 2021 after a tough year of pandemic restrictions as vaccination campaigns rolled out in the Kingdom and across the world driving its key oil exports.

MENA’s largest economy bounced back from last year, when the Kingdom’s gross domestic product contracted by 4.1 percent, according to the International Monetary Fund.

But this year saw higher oil output, its first quarterly budget surplus in over two years and lower unemployment drove growth.

Some economic data in 2021 even bettered pre-pandemic levels, although the full effect of the latest omicron variant is yet to be played out. 

Here are the Kingdom’s economic key highlights this year:

First quarter: Oil exports lift

The value of oil exports continued its rebound in the first quarter of 2021, rising for the third consecutive quarter and hitting the highest level since the final quarter of 2019, according to official data. 

However, in all four quarters of 2021, the Kingdom’s oil exports were lower when compared to the corresponding periods in 2019.

 

Second quarter: Unemployment eases

Oil and non-oil exports grew by an annual rate of 123 percent and 61 percent in the second quarter by value, respectively, according to the General Authority for Statistics. These were the highest annual growth rates for both categories since at least 2018.

In June, the value of Saudi Arabia’s oil exports increased by 123 percent to SR61.5 billion ($16.4 billion) from a year ago, said GASTAT. 

Oil exports accounted for 72 percent of total exports in June, up from 62 percent in the same month last year, it added. 

HIGHLIGHTS

MENA’s largest economy bounced back from last year, when the Kingdom’s gross domestic product contracted by 4.1 percent, according to the International Monetary Fund.

This year saw higher oil output, its first quarterly budget surplus in over two years and lower unemployment drove growth.

Some economic data in 2021 even bettered pre-pandemic levels, although the full effect of the latest omicron variant is yet to be played out.

The unemployment rate among Saudi nationals fell to 11.3 percent in the second quarter, the lowest since at least the same period in 2016, said GASTAT, attributed to ongoing government efforts to boost local employment in the private sector.

By contrast, Saudi unemployment had hovered at a mean rate of 13.7 percent in 2020.

 

The third quarter: Budget surplus and falling inflation

The value of oil exports hit SR206.6 billion in the third quarter, the highest since the final quarter of 2018, as the sector enjoyed rising demand and higher prices.

This led the Kingdom’s GDP to jump by 7 percent in the period, the highest annual rate since 2012. Oil and non-oil output surged by 9.3 percent and 6.3 percent, respectively.

The Ministry of Finance added that the Kingdom recorded its first quarterly budget surplus since the first quarter of 2019. The surplus was valued at SR6.7 billion, reversing a SR4.6 billion deficit in the previous quarter. 

The upswing was driven by multiyear high crude prices and government social spending cuts, as the pandemic eased.

In August, the annual inflation rate in the Kingdom hit its lowest level in 20 months, reaching 0.3 percent. Rises in consumer prices in the second half of the year slowed as the effects of the VAT hike from 5 percent to 15 percent in July 2020 faded. 

The inflation rate in June 2021 had been 6.2 percent, which tumbled to 0.4 percent in July.

The Saudi private sector experienced its strongest growth in September since 2015, according to IHS Markit, driven by new orders and higher output. Shoppers received a boost following the easing of lockdown restrictions, driving growth.

Back in 2020, Saudi Arabia’s annual inflation rate averaged 3.4 percent, driven by the VAT rise. 

Also, the budget deficit hit SR293.9 billion in 2020, rising more than two-fold compared to 2019. Spending on social benefits, subsidies and grants were all raised, at the height of the pandemic.

 

The fourth quarter: More oil production

Saudi oil exports and production in October hit their highest levels since April 2020, according to data published by Jodi. Oil shipments lifted 5 percent on the previous month to 6.83 million barrels per day. Fuel production rose to 9.78 million bpd, only slightly higher than in September, but this was 9 percent up on a year ago.

 

Forecasts for 2022

The outlook for the Saudi economy next year is favorable, according to government and economic forecasters.

The Ministry of Finance expects a 2022 budget surplus of SR90 billion as revenues are set to grow by 12.4 percent compared with estimated revenues for this year. Spending is expected to narrow by 5.9 percent. This will give the Kingdom its first fiscal surplus since 2013, if achieved.

The ministry forecasts that the economy will grow by 7.4 percent next year.

Capital Economics has a similar forecast of 7.3 percent, saying that oil production will push up the Kingdom’s output in 2022.

The GCC Statistical Center, Jadwa Investment as well as Capital Economics expect Saudi Arabian inflation in 2022 to settle at between 1 and 2 percent as last year’s VAT rise continues to ease.


Airports in GCC are turning stopovers into tourism growth

Updated 14 February 2026
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Airports in GCC are turning stopovers into tourism growth

  • Governments and airport operators are turning aviation as a central pillar of tourism and economic strategy

CAIRO: Once defined by fleeting layovers and duty-free corridors, airports across the Gulf Cooperation Council are increasingly gateways to short-stay tourism, driving non-oil growth, hospitality revenues and job creation. 

Across the region, governments, airlines and airport operators are treating aviation not merely as a transport sector but as a central pillar of tourism and economic strategy. Through streamlined visa regimes, airline-led stopover programs and sustained investment in airport infrastructure and technology, GCC countries are turning transit passengers into visitors. 

“Across the GCC, destinations have shifted from functioning primarily as global transit hubs to positioning themselves as places travelers actively choose to visit, even for short stays during onward journeys,” Nicholas Nahas, partner at Arthur D. Little, told Arab News. 

Airports in the Middle East are investing heavily in biometric processing systems, e-gates and digital border controls designed to shorten waiting times and improve passenger flow. These upgrades, backed by coordinated public-private initiatives, are narrowing the gap between arrival and exploration, making short stays viable even for passengers transiting for less than 48 hours. 

Unified GCC visa 

Two years after its initial proposal, the long-discussed unified GCC tourist visa is moving through final coordination stages, a development expected to further accelerate tourism spending linked to stopovers. 

Looking ahead, the visa could allow the region to function as a single tourism corridor. Robert Coulson, executive adviser for real estate at Accenture, said the next phase is about regional continuity. “The next leap for the GCC is making the region feel like one seamless journey while differentiating each stop with a distinct identity,” he told Arab News. 

First proposed in 2023 and approved in principle in 2024, the visa is designed to allow travel across Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE under a single permit. Analysts say Saudi Arabia is positioned to be among the biggest beneficiaries, given its scale, expanding destination portfolio and growing aviation capacity. 

The unified visa is expected to complement existing stopover initiatives by allowing travelers to combine short visits to Saudi Arabia with trips to Dubai or Doha, effectively turning the Gulf into a single multi-country itinerary rather than a series of isolated transit points. 

Saudi aviation surge 

Saudi Arabia’s aviation-driven tourism growth has accelerated rapidly. The Kingdom welcomed an estimated 122 million visitors in 2025, moving closer to its Vision 2030 target of attracting 150 million tourists annually. 

“GCC travel hubs have stopped selling connections and started selling experiences,” Coulson said. “They’ve cracked the stopover-to-stayover model, turning a layover into a mini-holiday rather than dead time.” 

In January, Abdulaziz Al-Duailej, president of the General Authority of Civil Aviation, said international destinations served from Saudi Arabia increased to 176 in 2025, while the Kingdom remained home to some of the world’s busiest air routes. 

He credited this performance to the “unlimited support” of the Kingdom’s leadership, identifying aviation as a key enabler of Vision 2030 and broader economic diversification. 

Saudi Arabia’s newest airline, Riyadh Air, is expected to contribute more than $20 billion to non-oil gross domestic product and create over 200,000 direct and indirect jobs, underscoring aviation’s expanding economic footprint. 

A key pillar of Saudi Arabia’s strategy has been the introduction of a digital stopover visa in 2023, allowing transit passengers to enter the Kingdom for up to 96 hours. The initiative enables short visits for Umrah, trips to Madinah or exploration of the country’s cultural and historical sites.  The policy reflects a broader regional effort to turn time spent between flights into economic activity beyond the airport terminal, particularly in hospitality, transport and cultural tourism. 

Short-stay shift 

This evolution has been driven by global connectivity, simplified visa access and the ability to deliver high-quality experiences within a 24-to-72-hour window. The UAE, particularly Dubai, was the earliest and most established example of this transition, converting a growing share of its transit traffic into visitors through airline-led stopover packages, flexible visa categories and dense, short-stay-friendly attractions. 

Dubai International Airport handles more than 85 million passengers annually. Curated stopover products combining hotel stays with cultural and entertainment experiences have helped transform transit traffic into leisure demand. Direct metro access and streamlined entry processes have further reduced friction. As a result, Dubai welcomed around 19 million international overnight visitors in 2025. 

Other GCC destinations have since adopted similar models. Abu Dhabi expanded stopover offerings through its national carrier, promoting entertainment and cultural districts as compelling short-stay experiences. Qatar embedded stopover tourism into its national tourism strategy, converting transfer traffic at Hamad International Airport into city stays. Saudi Arabia expanded its tourism offering through its 96-hour digital visa linked to onward flights. 

A smooth transit experience is often the deciding factor in whether passengers remain airside or choose to explore. Fast entry processes, intuitive airport design and reliable airport-to-city connectivity can turn even a six- to eight-hour layover into usable time rather than idle waiting. 

Under Vision 2030, Saudi Arabia has invested heavily in airport expansion, digital border processes and urban mobility projects designed to shorten the distance between arrival and experience. Airline stopover platforms, transport apps and airport-based destination messaging increasingly reduce uncertainty and enable spontaneous exploration. 

Beyond transit traffic, Nahas said tourism growth across the GCC has been driven by integrated destination ecosystems. Successful destinations are designed end-to-end — from trip planning and arrival through accommodation, mobility, experiences and departure — requiring coordination across tourism authorities, airlines, airports, transport providers and experience operators. 

Designing destinations 

For developers shaping the region’s next phase of tourism growth, the focus has shifted toward creating destinations that capture travelers from the moment they arrive. 

Sultan Moraished, group head of technology and corporate excellence at Red Sea Global, said next-generation destinations are being designed to resonate with global travelers beyond a flight connection. 

“As we design and build next-generation destinations, our focus is always on creating experiences that resonate with global travelers from the moment they arrive to when they choose to explore beyond a flight connection,” he told Arab News. 

Moraished said offering experiences travelers cannot find elsewhere, from cultural immersion to nature-based activities, creates compelling reasons to extend visits beyond simple transit. He added that collaboration across aviation, hospitality and destination authorities ensures that every part of the journey is aligned with a shared vision for tourism growth. 

Looking ahead, Moraished said the intersection of innovation and hospitality will continue to open new pathways, from smart digital experiences to regenerative tourism practices that appeal to increasingly conscious travelers and encourage repeat visitation. 

Experience economy 

Airports have shifted from being standalone infrastructure assets to functioning as world-class distribution engines for cities and destinations. Investments in gateway airports have made them part of the destination brand promise. 

Tourism operates as a continuous conversion funnel, Coulson said. Every step removed between the flight gate and the city increases the likelihood that travelers will leave the terminal and spend money locally. Fast connections, predictable baggage handling and clear wayfinding reduce perceived risk, while simplified transit visas make spontaneity possible. 

A unified GCC tourist visa could unlock longer stays and multi-country itineraries, supported by investment in walkable districts, waterfronts and climate-smart design. 

Taken together, the transformation of transit hubs into tourism powerhouses reflects a broader shift in how the Gulf approaches aviation-led growth. Airports are no longer just points of passage but economic gateways where short stopovers translate into tourism spending, jobs and long-term diversification.