Fueled by a surging private sector and expanding non-oil industries, Saudi Arabia is poised to become the G20’s fastest-growing economy in 2027, overtaking India, according to International Monetary Fund (IMF) forecasts released last week. The IMF expects the Saudi economy to grow by 7.9%, ahead of India’s projected 7%, highlighting the Kingdom’s economic transformation as regulatory and legislative reforms unlock new investment opportunities. Saudi Arabia’s Ministry of Investment said the forecast underscores the economy’s strength and resilience while opening new avenues for investment and growth. Momentum in the private sector and the expansion of non-oil activities are helping steer the Kingdom toward a more diversified, sustainable and investment-friendly economy, it said. The IMF sharply raised its forecast for Saudi Arabia’s real gross domestic product (GDP) growth to 7.9%, from 5.5% in July, an upward revision of 2.4 percentage points that reflects prospects for recovery from the fallout of war and disruptions to trade and energy markets. The outlook also highlights the structural transformation underway through Saudi Arabia’s Vision 2030, as non-oil sectors take on a greater role in driving growth and strengthening the economy against global headwinds. The focus now shifts to whether the Kingdom can sustain that momentum and turn rapid expansion into lasting investment opportunities and jobs. New sectors drive growth Saudi Arabia’s projected lead among G20 economies signals a deeper structural shift away from its traditional reliance on oil revenues, according to Fahad Binjumah, an economist and former member of the Saudi Shura Council. The private sector is emerging as a major engine of growth, bolstered by regulatory and legislative reforms, expanding investment opportunities and the rising contribution of non-oil industries. Binjumah told Asharq Al-Awsat that the shift marks Saudi Arabia’s gradual transition from direct government stimulus toward a more diversified and productive economy capable of generating growth. Major government investments have helped lay the groundwork, creating a stronger business environment and opening new sectors to local and foreign investors, he explained. Strategic projects in tourism, industry, logistics and technology are also generating economic activity well beyond their immediate scope. Investment spending is rippling through supply chains and small and medium-sized businesses, widening commercial opportunities and drawing more parts of the economy into the growth cycle. But for Binjumah, topping the G20 growth rankings is less important than sustaining that performance over the coming years. "The main challenge is to turn economic expansion into long-term productivity gains by improving the efficiency of domestic businesses, boosting non-oil exports, developing skills and increasing private investment independent of government spending," he stressed. Progress on those fronts would propel Saudi Arabia into a more advanced stage of economic diversification, where success is measured not simply by rapid growth but by a more resilient, competitive economy that generates added value and sustainable jobs, he added. Reforms bolster economic resilience Saudi Arabia’s rise in G20 growth projections is the product of years of economic reform, not a short-lived boost in any single sector, said Nasser Al-Sahli, president of the Saudi Governance Center. Legislative changes, easier business procedures, wider investor participation and the restructuring of key sectors have made the economy more attractive to investment and better equipped to turn capital into productive activity, Al-Sahli told Asharq Al-Awsat. The private sector’s expanding role shows that these reforms are increasingly translating into tangible economic gains, he said. Their importance has grown amid geopolitical tensions, global trade and energy disruptions, and risks surrounding strategic maritime routes in the region. A broader non-oil economic base is helping Saudi Arabia diversify its income sources and reduce its exposure to external shocks. "Economic diversification does not mean complete isolation from global developments, but building a productive and investment system capable of adapting to them and maintaining business continuity under different conditions," Al-Sahli said. The next test will be whether Saudi Arabia’s private sector can move beyond capitalizing on opportunities created by government projects to driving investment expansion independently and sustainably, he went on to say. That will require stronger productivity and competition, better access to financing, greater innovation and a larger international footprint for Saudi companies. Al-Sahli said the real significance of Saudi Arabia’s projected G20 lead lies not in the ranking itself but in its ability to turn growth momentum into a more diversified and efficient economy, powered by a private sector that creates high-quality jobs and lasting economic value. How G20 economies rank India is forecast to rank second in G20 economic growth in 2027 at 7%, followed by Indonesia at 5.1%, China at 4% and Türkiye at 3.6%, according to IMF figures presented by the Saudi Ministry of Investment. Argentina ranks sixth at 3.5%, followed by South Korea at 2.8% and the United States at 2.3%. Brazil is projected to grow by 1.9%, Mexico by 1.8%, Canada by 1.7%, Australia by 1.6%, South Africa by 1.3% and the United Kingdom by 1.2%. Germany is forecast to expand by 1.1% and Russia by 0.9%, while France and Japan are each expected to grow by 0.7%.
