RIYADH: The International Monetary Fund (IMF) has highlighted the Kingdom of Saudi Arabia’s (KSA) tourism sector as a major contributor to the Kingdom’s economic diversification in its 2024 Article IV Consultation report.
Vision 2030 Tourism Target
The report also acknowledges the Kingdom of Saudi Arabia’s (KSA) success in exceeding the Vision 2030 target of attracting about 100 million visitors annually by 2023, seven years ahead of schedule. According to the Saudi Press Agency (SPA), tourism sector revenues reached $36 billion in 2023, with net tourism income increasing by 38 percent. The tourism’s direct and indirect contribution to GDP reached 11.5 percent in 2023, with potentials to increase to 16 percent by 2034.
Central to this growth has been a combination of increased international arrivals and strong domestic demand. Non-religious tourism has also surged, with increased leisure travel as well as visits to friends and relatives driven further by major global events like Formula One, the 2027 Asian Cup, and the 2030 World Expo.
The IMF report also underlines the role of tourism in shifting the Kingdom of Saudi Arabia’s service balance to a surplus. This means that the Kingdom of Saudi Arabia is now earning more from international visitors than it is spending on outbound tourism. By 2022, this shift resulted in a positive balance, and 2023 witnessed further gains through increased revenue from transportation and service exports.
Vision 2030
Crucial to this transformation are the diverse linkages Saudi Arabia’s tourism sector has created across industries, such as beverage, food, cultural industries, travel, and accommodation. Major giga projects like Red Sea Global and Diriyah Gate are pivotal in this shift, as they focus on luxury tourism, culture preservation as well as infrastructure improvements. Vision 2030 remains the Kingdom of Saudi Arabia’s (KSA) comprehensive economic reform plan, with tourism at its core. IMF’s recognition of the Kingdom of Saudi Arabia’s progress reflects the vast potential of its tourism sector and its capacity to drive sustainable economic growth in the years to come, it was pointed out.
