The Saudi non-oil economy now represents 56% of the Kingdom’s SAR 4.7 trillion GDP, according to a report released by PwC Middle East on February 18, 2026. The report, titled “The Next Phase of Economic Diversification,” examines how future growth will depend on competitiveness, productivity, and export capability rather than scale alone.
PwC Middle East analysis shows that non-oil growth remains linked to oil market conditions. A 10% change in oil prices correlates with a 0.5% change in non-oil GDP. The report indicates that a sustained 10% decline in oil prices could reduce cumulative non-oil GDP by approximately SAR 430 billion over three years, measured in 2024 constant prices.
Productivity and Export Focus
The report’s modelling suggests that shifting toward productivity-oriented and export-oriented growth could raise non-oil GDP by an estimated 5.5% by 2035. This approach would strengthen economic resilience in the Kingdom, according to the analysis.
Riyadh AlNajjar, Middle East Chairman of the Board and KSA Senior Partner at PwC Middle East, said the Kingdom has made progress in expanding non-oil activity. He stated that the next phase of diversification will be shaped by investment quality, with focus on productive capabilities, private sector participation, and activities that can compete in external markets.
Export-Oriented Growth Framework
The report outlines a framework to guide investment decisions as the non-oil economy matures. The framework emphasizes tradable competitiveness, capability development, domestic value creation, skills intensity, and private sector participation. Applying this framework could raise total factor productivity by approximately 10% by 2035, supporting the estimated 5.5% increase in non-oil GDP over the same period.
The themes are relevant across manufacturing, logistics, tourism, technology-enabled industries, and higher-value services. As these sectors develop, export-facing activity, capability building, and private-sector participation will play a larger role in supporting growth, higher-quality jobs, and integration into regional and global markets.
Reducing Oil Cycle Exposure
Faisal Alsarraj, KSA Deputy Country Leader at PwC Middle East, stated that reducing exposure to oil cycles requires building businesses that can compete beyond the domestic market. He said investment that strengthens supply chains, raises productivity, and attracts private capital creates resilience that public spending alone cannot deliver.
Future Outlook
The findings point to an evolution in Saudi Arabia’s growth model. Greater emphasis on disciplined capital allocation, export capability, and private-sector-led value creation will be central to reducing the influence of oil cycles on non-oil performance. This shift aims to underpin a more resilient and self-sustaining economy in the Kingdom.
Non-oil sectors have expanded since the launch of Vision 2030, with activity across retail, tourism, hospitality, and services contributing to the broader economic base. The report indicates that as fiscal conditions evolve, the composition of investment is becoming more important than its volume for sustaining future growth.