Saudi Vision 2030 and Liquidity Constraints: Evaluating Financing Requirements, Aramco Dependency, and Geopolitical Risks to Sustainable GDP Growth

Abstract

This paper will assess the economic sustainability of economic transformation in Saudi Arabia with regard to the liquidity constraints, dependence on Saudi Aramco and geopolitical risk at Vision 2030 level. The work assumes a mixed-methodology approach to the research onion paradigm since the research relies on secondary data analyzed in 2016-24 to understand the tendencies in GDP growth, oil revenue reliance, credit growth and investment requirements.

The findings indicate that despite the diversification programs, with non oil GDP increasing with an average of 4-6 years, the economy still remains dependent on oil revenue and is contributing around 65-70 percent of the government revenue to the economy. The paper concludes that the liquidity constraints are critical that are fuelled by the high level of investment requirements estimated to be USD 1 trillion or more, the rise in the interest rates and the inability to finance the investments at the domestic level. Saudi Aramco has stayed at the centre of the supply in the aspect of fiscal assistance, whereas the dependence is a risk that exposes the market to the oil market volatility.

Other than geopolitical risks, including the interruption of main trade routes, particularly the Strait of Hormuz, great impact on the volumes of exports, increase the logistics price by 20-25 percent, and slows down the project implementation. All these influence financing and economic growth.

It concludes in the paper that economic sector and source financing diversification is to be adopted to achieve sustainable GDP growth of 5 7 per cent. Suggestions on the policy will include empowering the capital markets, strengthening foreign direct investment, promoting green financing, and breaking the links with reliance on the oil revenues. The study fills the body of literature by using one analytical approach on economic transformation in resource-dependent economies by including the financial, structural, and geopolitical levels.