UK-Saudi Trade: Saudi's Economy Overview

Saudi Arabia is the Gulf's powerhouse economy. Though relatively smaller as an economy, its market liberalisation & growth efforts over the past decade have been clear and yielding results: foreign access and investment is on the up, cutting-edge infrastructure is being developed, and the capital markets required to sustain and facilitate growth at mid-market & enterprise levels are proving to do exactly that. Here's an introduction to Saudi's economy.

‍

‍

Executive Summary

Saudi Arabia stands as the Gulf's powerhouse economy with £920 billion real GDP (2025 est.) and 35 million population, driven by accelerating non-oil diversification under Vision 2030. With non-oil and service sectors exceeding 50% of GDP, the Kingdom has achieved a fundamental economic transformation backed by substantial capital market depth - 97 publicly-listed companies with $1B+ revenue and corporate loan volumes representing 55% of overall bank loans at $467B. The £370 billion investment into giga-projects like NEOM and Diriyah is catalysing rapid expansion across construction, tourism, logistics, finance, and digital sectors, and providing a large consumer market: consumer spending reached £320B in 2024 and is projected to almost 3x to over £900B by 2030. Saudi Arabia has transitioned from an oil-centric market to a diversified, policy-driven investment destination, attracting record foreign investments of $58 billion in 2024 and offering 100% foreign ownership in most sectors.

‍

‍

Market Fundamentals

Saudi Arabia emerges as the Gulf's largest economy with £920 billion real GDP (2025 est.) and 35 million population, achieving £28,000 GDP per capita - approaching developed market levels. Non-oil and service sectors now exceed 50% of GDP, marking a fundamental shift from oil dependency under Vision 2030. The Kingdom's capital markets demonstrate exceptional depth with 97 publicly-listed companies generating $1B+ revenue across financials, energy, telecoms, and industrials, supported by deepening liquidity and a robust IPO pipeline that raised SAR 7.1 billion in the first four months of 2025 alone. Corporate lending represents 55% of overall bank loans at $467 billion, marking one of the largest credit expansions in global history and positioning banks for sustained project-led growth. External accounts reflect strong net asset position with moderate public debt at 29.9% of GDP, while government reserves at SAMA maintain SAR 390 billion, providing substantial fiscal space despite ongoing deficits. The business environment has undergone dramatic liberalisation, with Saudi Arabia ranking 62nd globally for ease of doing business and 100% foreign ownership now permitted in most sectors. Foreign investor confidence remains robust, with £64 billion in Saudi-based assets held by qualified foreign investors and foreign capital market investments reaching $58 billion in 2024.

‍
Saudi Arabia's trade activities reflect ambitious FDI targets of 5.7% of GDP by 2030, with net inflows reaching SAR 22.2 billion in Q1 2025, marking 44% year-on-year growth. The Kingdom achieved a trade surplus of SAR 63 billion ($16.8 billion) in Q1 2025, with total trade valued at SAR 508 billion. Hydrocarbons remain the export anchor at 71.8% of total exports in Q1 2025, reflecting the Kingdom’s continued reliance on oil revenues. In April 2025, non-oil exports surged 24.6% year-on-year, led by chemicals and plastics & rubber, which accounted for 21.0% and 21.7% of non-oil exports respectively. Trade partnerships demonstrate global diversification: China leads as the top destination (15.5% of exports) and import source (25.3%), followed by India (9.4% exports) and Japan (8.7%). Major imports include machinery and electrical equipment, vehicles, and specialised equipment for mega-projects. The Kingdom imports $232.81 billion annually, primarily from China ($55.67B), US ($19.77B), and UAE ($12.83B). Policy levers include the National Investment Strategy targeting 30% investment-to-GDP ratio by 2030, enhanced commercial registration (CR) systems establishing a unified national CR framework, and the Standard Incentives Programme which is part of over 140 initiatives supported by the National Industrial Strategy, creating favourable conditions for strategic investors and advanced services providers across priority sectors.

‍

‍

Infrastructure Development Drivers

Saudi Arabia's infrastructure transformation centres on Vision 2030's National Investment Strategy targeting 30% investment-to-GDP ratio by 2030. The £370 billion investment in giga-projects, including NEOM ($5 billion AI data centre partnership), Red Sea, and Diriyah, catalyses construction, hospitality, mobility, and environmental services ecosystems. The National Industrial Strategy aims to increase industrial sector GDP contribution from $88.26 billion to $377.06 billion by 2035, creating 3.3 million jobs across 118 segments in 12 sub-sectors with 64% localisation targets. Technology and energy infrastructure expansion includes $14.9 billion in AI investments announced at LEAP 2025, with cloud computing spending projected to reach $4.7 billion by 2027 and AI contributing $130–135 billion to GDP by 2030. The National Transport and Logistics Strategy encompasses $133.3 billion in infrastructure investments, including the $7 billion Saudi Landbridge connecting Red Sea to Arabian Gulf, expanding railway networks to 8,080km, and developing 69 logistics platforms targeting 10% GDP contribution by 2030. Port infrastructure upgrades achieved 12% container volume growth in July 2025, with $2.67 billion invested across 18 logistics hubs. The Kingdom's strategic location enables connectivity to Red Sea–Mediterranean routes, GCC markets, Africa, and Asia through enhanced multimodal transport networks supporting its emergence as a global logistics hub.

‍

‍

Growth Catalysts & Challenges

Saudi Arabia's growth trajectory benefits from exceptional catalysts including a strong sovereign balance sheet with moderate 29.9% debt-to-GDP ratio, PIF-backed project pipeline worth £370 billion, and structural reforms achieving 36.2% female workforce participation - up from 19.7% in 2018. Tourism-led services growth saw 8.6 million international visitors in Q1 2025 (+48% YoY), with the sector projected to grow 8% annually and contributing $12 billion to the economy. The construction sector, valued at $105 billion in 2024, expects 8.7% CAGR growth to $174 billion by 2030.

‍

Despite Saudi Arabia's strong economic fundamentals, several challenges merit consideration. Currency stability remains pegged to dollar, though oil price volatility below the estimated $90/barrel budget breakeven point creates fiscal pressures given the Saudi treasury's substantial (even if waning) reliance on oil. Regulatory complexity adds business pressure to fledgling businesses in the Kingdom - for example, 85% of Saudi companies were obliged to upgrade compliance frameworks and processes in 2025 due to evolving ESG mandates, e-invoicing requirements, and Ultimate Beneficial Ownership rules in April 2025.

‍

High skilled human capital challenges remain acute: despite 300,000+ university graduates annually, 60%+ of technology, data, engineering, and finance roles are held by non-Saudis, with unemployment targets revised to 5% by 2030 from the current 7%. The Saudisation policy (Nitaqat system) requires specific Saudi national employment quotas, often hindering international high-skill businesses from operating in the region due to a small appropriately-skilled domestic talent pool and restrictions in the ability to on-shore international talent. Added to this, operational costs remain elevated, with bureaucratic approval processes and licensing complexities affecting market entry timelines. Oil dependency persists despite diversification efforts, with crude oil volatility significantly impacting financial markets and capital flows.

‍

‍

For further analysis on export-country economic research, professional services market landscapes and UK services trade, visit our Resources page.