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The changing political situation in the Middle East poses challenges for the economies of the region, and some see none more vulnerable to collapse than Saudi Arabia's. Yet as this study demonstrates, the fundamentals of the Kingdom's economy are relatively robust, as over three quarters of GDP is accounted for by the non-oil sector, and impressive modern industries have been established, notably in petrochemicals. The financial system functions well, and despite substantial government debts, there is low inflation and currency stability. The private sector increasingly drives the economy, although job creation has been insufficient to prevent rising youth unemployment. The development challenges Saudi Arabia faces are similar to those of other middle-income countries, and three decades of diversification have made the economy less unique than it was in the oil boom years of the 1970s.
The changing political situation in the Middle East poses
challenges for the economies of the region, and some see none more
vulnerable to collapse than Saudi Arabia's. Yet as this study
demonstrates, the fundamentals of the Kingdom's economy are
relatively robust, as over three quarters of GDP is accounted for
by the non-oil sector, and impressive modern industries have been
established, notably in petrochemicals. The financial system
functions well, and despite substantial government debts, there is
low inflation and currency stability. The private sector
increasingly drives the economy, although job creation has been
insufficient to prevent rising youth unemployment. The development
challenges Saudi Arabia faces are similar to those of other
middle-income countries, and three decades of diversification have
made the economy less unique than it was in the oil boom years of
the 1970s.
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