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CHAPTER 2
THE SAUDI ARABIAN ECONOMY
OVERVIEW
On 6/3/1416 H, corresponding to August 2, 1995, the Custodian of the Two Holy
Mosques, King Fahd Bin Abdul Aziz issued a royal decree forming a new Council of
Ministers. King Fahd described the new ministers as young, highly educated individuals
with a record of achievement, and as such would contribute to the Kingdom’s continued
development in various fields. The new ministers are setting their priorities under the
sixth development plan (1415-1420 H., corresponding to 1995-1999) in order to achieve the
following macroeconomic goals by the end of the current plan period:
- A real annual average growth rate of 3.9 percent in the non-oil sector.
- A real annual average growth rate of 8.5 percent in total investment.
- An annual average growth rate in non-oil merchandise exports of 12 percent in current
prices.
- Rationalization of government expenditure in order to achieve a balanced budget by the
end of the sixth plan period.
- Elimination of the balance of payments' deficit on current account.
- Increase in the government’s domestic non-oil revenues.
- Continuing the privatization process by providing better opportunities for the private
sector investment through the selective use of alternative financing options and
privatization initiatives.
- Mobilization of private savings through the broadening of domestic capital market.
- Increase in the productivity of the Saudi labor force through better education, training
and the reduction of the number of low-skilled workers.
- Shift the government budget from consumption to investment expenditure.
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