Saudi Arabia set to be the world’s fastest growing economy and what this means for the talent landscape
According to IMF forecasts, Saudi Arabia is poised to join the trillion-dollar club this year, largely spurred by the global spike in energy prices, especially crude oil. The rapid economic growth in the kingdom is attributable to significant oil income - on July 31, data from the government showed that the GDP rose by 11.8% year on year in Q2. According to Forbes, profit in the oil sector has reached up to 23.1%, while non-oil growth has climbed by 5.4%.
According to IMF predictions, the kingdom's economy would rise by 7.6% this year, raising the kingdom's GDP to up to $1,040 billion.
The IMF lauded the Kingdom's economy and financial situation, underlining the Saudi economy's favorable economic outlook in the near and medium term, with ongoing recovery of economic growth rates, inflation containment, and a growing external economic position. Economic activity in the Kingdom is improving significantly, aided by high oil prices and reforms supported by the government's implementation of Vision 2030, with a limited impact from tighter global conditions due to the banking sector's high levels of capitalization.
What is behind this upsurge?
In addition to successfully overcoming the pandemic, new and ongoing activities related to Vision 2030, as well as major infrastructure and other projects sponsored by the Public Investment Fund, are producing an increasing number of job opportunities.
According to the General Authority for Statistics, Vision 2030, which intends to diversify the economy away from oil, is generating $1 trillion in new projects that have created 555,000 new jobs over the last four years. The fund aspires to invest at least $40 billion per year in the domestic economy through 2025, creating 1.8 million jobs as part of a five-year strategic roadmap.
The Kingdom's efforts to promote Riyadh as the premier commercial and startup hub in the MENA region are well underway as part of its transition away from being an oil and gas giant.
All of this is attracting a wave of multinational firms and global investors with Middle Eastern economic interests to establish regional headquarters in the kingdom.
Empowering the workforce
To ensure the success of this economic transition, the Kingdom is also ensuring that its workforce can compete on a global level by instilling values, strengthening primary and secondary skills, and widening knowledge.
Saudi Arabia has taken a proactive approach to developing a human resource plan that addresses the skills gap while also developing talent competencies across key industries.
Several effective transformative improvements, notably the continuation of upskilling and capacity-building efforts during the pandemic, have enabled this.
Focusing on the youth
Vision 2030 aims to develop and expand professional capacities, particularly among the youth, in order to better prepare them for the future and aid them in seizing emerging opportunities.
While competing for global talent, this will allow the country's workforce to effectively participate in continuous local economic, social, and cultural growth. Surprisingly, the local demographics favor this - as of 2022, the urban population accounts for 84.7 percent of the Kingdom's population, or 30.36 million people — and the majority of urban dwellers live in or near major cities and economic hubs like as Riyadh, Dammam, Makkah, and Jeddah.
This young, educated, and tech-savvy urban population is reinventing consumerism, travel, and trade throughout the MENA region, and so reshaping the traditional workforce strategy to which we have all become familiar with.
While retaining its oil operations, the country is also focusing on reinvesting oil income in other businesses in order to diversify its economy. As the world shifts to sustainable energy, strategic diversification will ensure that Saudi Arabia's economy develops sufficiently to position itself at the top.