Al-Jadaan: Going beyond traditional policy revived the Saudi economy with 5% growth annually
Finance Minister Mohammed Al-Jadaan confirmed today, Wednesday, that Saudi Arabiahas succeeded during the past eight years in changing the traditional financial policy pattern, and shifting from a financial policy "Keeping pace with the economic cycle" To approach "Reverse the cycle"which contributed fundamentally to achieving strong and sustainable growth rates despite the challenges.
Al-Jadaan explained in his speech during the first session of the Saudi Budget 2026, the historical challenge that faced the Saudi economy for decades was the direct connection of government spending to the cycle of economic activity, especially oil activity. During periods of improving oil prices and increasing revenues, spending would rise, while it would decrease during periods of recession, which increased growth volatility and threatened the stability of the economy.
Separating spending from oil fluctuations
He The Minister of Finance noted that the period from 2016 to the end of 2024 witnessed intense government efforts to separate the path of spending from the fluctuations of the economic cycle. A financial strategy was adopted that moves in the opposite direction of the cycle: increasing stimulus spending when local or global growth slows, and controlling it when growth accelerates and inflationary risks emerge.
Tangible Results
This approach, according to Al-Jadaan, yielded tangible results represented by achieving an average growth of about 5% annually in non-oil activities during the past eight years, and growth of the oil sector at negative 0.5% on average for the same period, which highlights the success of the policy in compensating for the impact of declining growth in the traditional sector through… Activating other sectors.
The adoption of this approach resulted in directing spending through well-studied mechanisms towards economic activities and basic services that reflect positively on the citizen, and their effects appear in increasing consumption and investment.
Continuation of the future approach
Al-Jadaan pointed out that yesterday’s announcement regarding the Saudi budget confirms the continuation of this strategic approach for at least the next three years (until 2028), with the expectation that it will continue until the horizon of Vision 2030. This is to ensure the completion of the long-term projects and strategies that the Kingdom needs to achieve balanced economic development. And stable, away from the fluctuations of the oil market.
He added: "Thus, the Kingdom is devoting a financial model that prioritizes macroeconomic stability and sustainable growth, relying on long-term planning horizons and flexibility in the face of cyclical challenges.".
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