Editing Economy of Saudi Arabia (section)

==Challenges==
Among the challenges to the Saudi economy include halting or reversing the decline in per capita income, improving education to prepare youth for the workforce and providing them with employment, diversifying the economy, stimulating the private sector and housing construction, and diminishing [[corruption in Saudi Arabia|corruption]] and inequality. In answer to the question of why the Saudi economy is so dependent on foreign labor, the UN [[Arab Human Development Report]] blamed stunted social and economic development inhibited by lack of personal freedom, poor education, government hiring based on factors other than merit, and the exclusion of women.<ref name="ref=HT2009: 206">[[#HT2009|Long, ''Culture and Customs'', 2009]]: p. 206</ref>

===Income drop===

Despite possessing the second largest petroleum reserves in the world, per capita income dropped from approximately $18,000 at the height of the oil boom (1981) to $7,000 in 2001, according to one estimate.<ref name=Cordesman-244>{{cite book|last=Cordesman|first=Anthony H.|title=Saudi Arabia Enters the Twenty-First Century, Volume 1|publisher=Greenwood|page=244|year=2003|url=https://books.google.com/books?id=tjpExwQWtOsC&q=peak+saudi+per+capita+income&pg=PA244|isbn=9780275980917|access-date=5 October 2020|archive-date=13 June 2021|archive-url=https://web.archive.org/web/20210613081542/https://books.google.com/books?id=tjpExwQWtOsC&q=peak+saudi+per+capita+income&pg=PA244|url-status=live}}</ref> As of 2013, due to the rapid population growth of Saudi Arabia,<ref>{{Cite web|url=https://foreignpolicy.com/2013/01/04/longforms-picks-of-the-week-43/|title=Longform's Picks of the Week [Will Saudi Arabia Ever Change?]|last=Clark|first=Laura|website=Foreign Policy|date=4 January 2013 |language=en|access-date=23 April 2019|archive-date=23 April 2019|archive-url=https://web.archive.org/web/20190423204338/https://foreignpolicy.com/2013/01/04/longforms-picks-of-the-week-43/|url-status=live}}</ref> per capita income in Saudi was "a fraction of that of smaller Persian gulf neighbors", even less than petroleum-poor [[Bahrain]].<ref name=eakins>{{cite journal|last=Eakins|first=Hugh|title=Will Saudi Arabia Ever Change?|journal=New York Review of Books|date=10 January 2013|quote=Despite Saudi control of the largest petroleum reserves in the world, decades of rapid population growth have reduced per capita income to a fraction of that of smaller Persian gulf neighbors. Event the people of Bahrain, a country with little oil that has roiled with unrest since early 2011, are wealthier.}}</ref>

Unlike most developed countries, where GDP growth is a function of increases in productivity and inputs such as employment, in Saudi Arabia the fluctuation of oil prices is the most important factor in the growth or decline of domestic production. "Saudi reserves are steadily being depleted, and no significant new discoveries have been found to replace them," according to Middle East journalist Karen House.{{As of?|date=March 2023}} Saudi population grew sevenfold from 1960 to 2010,<ref>{{Cite web |url=http://esa.un.org/unpd/wpp/unpp/Panel_profiles.htm |title=World Population Prospects: The 2010 Revision |access-date=26 August 2014 |archive-date=11 June 2011 |archive-url=https://web.archive.org/web/20110611141930/http://esa.un.org/unpd/wpp/unpp/Panel_profiles.htm |url-status=live }}</ref> and petrol prices are subsidized and cost users less than equivalent quantities of bottled water.<ref name=house-245>{{cite book|author=House, Karen Elliott|title=On Saudi Arabia: Its People, past, Religion, Fault Lines and Future|publisher=Knopf|year=2012|page=245|quote="In a country where a gallon of gasoline at roughly 53 cents is cheaper than bottled water and government energy subsidies are roughly $35 billion annually, Saudi energy consumption is rising at what one energy official calls an 'alarming rate.'"|title-link=On Saudi Arabia}}</ref> With production stagnant, growth in population and domestic energy consumption means a decline in per capita income unless oil prices rise to match that growth.<ref name=eakins />

After 2015, Saudi Arabia embarked on several initiatives, including Vision 2030, aimed at reducing its dependency on oil by investing in other sectors such as tourism, entertainment, and technology. [<ref>{{Citation |title=A vision for 2030 |date=2016-10-03 |work=Arab Development Outlook |pages=1–16 |url=http://dx.doi.org/10.18356/753c8f70-en |access-date=2024-08-05 |publisher=UN |doi=10.18356/753c8f70-en |isbn=978-92-1-058409-8|url-access=subscription }}</ref>] . Despite a decline in oil GDP, Saudi Arabia's GDP is expected to grow due to the increase in non-oil GDP. In the second quarter of 2024, Saudi Arabia's GDP contracted by 0.4% year-on-year, primarily due to an 8.5% decline in oil-related activities. However, non-oil activities grew by 4.4%, contributing to a seasonally adjusted growth of 1.4% compared to the previous quarter.<ref>{{Cite web |date=2024-07-31 |title=Economy records best reading since Q2 2023 in Q2 |url=https://www.focus-economics.com/countries/saudi-arabia/news/gdp/saudi-arabia-national-accounts-p-31-07-2024-economy-records-best-reading-since-q2-2023-in-q2/ |access-date=2024-08-05 |website=FocusEconomics |language=en-US}}</ref>

As of 2024, Saudi Arabia's GDP per capita has surpassed all other GCC countries except Qatar and the United Arab Emirates. Saudi Arabia's GDP per capita is estimated to be approximately $33,040 in nominal terms, ranking it 35th globally, and $70,333 in purchasing power parity (PPP) terms, ranking it as the 15th highest in the world [<ref name=":7" />]

===Demographics===
{{further|Demographics of Saudi Arabia}}
The Saudi population is young. About 51% of the total population are under the age of 25 (as of February 2012).<ref name=Murphy>{{cite web|last=Murphy|first=Caryle|title=Saudi Arabia's Youth and the Kingdom's Future|url=http://www.newsecuritybeat.org/2012/02/saudi-arabias-youth-and-the-kingdoms-future/|date=7 February 2012|publisher=Woodrow Wilson International Center for Scholars' Environmental Change and Security Program|access-date=13 May 2014|archive-date=26 February 2019|archive-url=https://web.archive.org/web/20190226064805/https://www.newsecuritybeat.org/2012/02/saudi-arabias-youth-and-the-kingdoms-future/|url-status=live}}</ref> According to a 2013 report by the [[International Monetary Fund]], up to 1.6&nbsp;million young nationals of the [[Arab states of the Persian Gulf|Persian Gulf countries]] (of which Saudi Arabia is the largest) will enter the workforce from 2013 to 2018, but the economies of those countries will have jobs in the private sector for less than half (approximately 600,000).<ref name=AP-2013>{{cite web|title=Saudi Arabia needs private sector growth to stem youth unemployment, business leaders say|url=https://www.foxnews.com/world/saudi-arabia-needs-private-sector-growth-to-stem-youth-unemployment-business-leaders-say/|date=3 December 2013|agency=Associated Press|work=Fox News|access-date=12 May 2014|archive-date=24 September 2015|archive-url=https://web.archive.org/web/20150924184700/http://www.foxnews.com/world/2013/12/03/saudi-arabia-needs-private-sector-growth-to-stem-youth-unemployment-business/|url-status=live}}</ref>

===Education===
{{further|Education in Saudi Arabia}}
According to ''[[The Economist]]'', the Saudi government has attempted in past years to raise employment by forcing "companies to fill at least 30% of their positions" with Saudi citizens. However, "employers complained bitterly about the lack of skills among young locals; years of rote-learning and religious instruction fail to prepare them for the job market." However, many argue that young Saudis couldn't compete with foreigners due to the low compensation and salaries most companies had used to offer for employees from Asian, Indian subcontinent, and other Arab poor countries, which this cheap labor happily accepts; in addition to the bad work conditions, culture, and environment present in most of the Saudi private sector, largely due to the fact that it was initially modeled to accommodate very-low-income employees from other nations, not the Saudi medium-income and somewhat highly educated population. As a consequence, "the quota has now been dropped and replaced with a more flexible system".<ref name=econ>{{cite news|title=Out of the comfort zone|newspaper=The Economist|date=3 March 2012|url=http://www.economist.com/node/21548973|access-date=13 May 2014|archive-date=14 October 2017|archive-url=https://web.archive.org/web/20171014041645/http://www.economist.com/node/21548973|url-status=live}}</ref>

According to scholar [[David Commins]], the kingdom depends "on huge numbers of expatriate workers to fill technical and administrative positions" in part because of an educational system that, despite "generous budgets", has suffered from "poorly trained teachers, low retention rates, lack of rigorous standards, weak scientific and technical instruction and excessive attention to religious subjects".<ref>{{cite book|last=Commins |first=David |title=The Wahhabi Mission and Saudi Arabia |publisher=I.B.Tauris |year=2009 |page=128|quote=Observers also note that in spite of generous budgets, Saudi education has been plagued by numerous problems: poorly trained teachers, low retention rates, lack of rigorous standards, weak scientific and technical instruction and excessive attention to religious subjects. Consequently, the kingdom has continued to depend on huge numbers of expatriate workers to fill technical and administrative positions.}}</ref><ref>{{cite journal|last=Roy |first=Delwin A. |title=Saudi Arabia education: Development policy |journal=Middle Eastern Studies|volume=xxviii|number=3 |year=1992 |pages=481, 485, 495}}</ref><ref>{{cite book|last=Abir |first=Mordechai |chapter=Modern Education and the evolution of Saudi Arabia education |title=National and International Politics in the Middle East: Essays in Honour of Elie Kedouirie| publisher=Routledge|year=1986|pages=481, 485, 495}}</ref>

A 2015 survey conducted by Bayt.com showed that over a quarter (28%) of professionals in North Africa and the Middle East believe that there is a skills shortage in their country of residence. This belief was even more prominent among respondents in Saudi Arabia (39%).<ref>[http://img.b8cdn.com/images/uploads/article_docs/bayt-salary-survey-0515-en_25290_EN.pdf ''The Middle East and North Africa Salary Survey – May 2015''] {{Webarchive|url=https://web.archive.org/web/20160304060858/http://img.b8cdn.com/images/uploads/article_docs/bayt-salary-survey-0515-en_25290_EN.pdf |date=4 March 2016 }}, Bayt.com. Retrieved 29 June 2015</ref>

===Innovation===

Saudi has not been a hotbed of technological innovation. The number of Saudi patents registered in the United States between 1977 and 2010 came to 382—less than twelve per year—compared to 84,840 patents for South Korea or 20,620 for Israel during that period.<ref>{{cite book|author=House, Karen Elliott|title=On Saudi Arabia: Its People, past, Religion, Fault Lines and Future|publisher=Knopf|year=2012|pages=162–64}}</ref><ref>Source: USPTO website accessed 17 May 2011</ref> However, in 2017 Saudi Arabia was granted 664 patents by the [[United States Patent and Trademark Office]], ranking 23rd among 92 countries.<ref>{{Cite web|url=https://www.arabianbusiness.com/politics-economics/394306-saudi-arabia-leads-arab-world-in-patents|title=Saudi Arabia leads Arab world in patents| last=Debusmann | first=Bernd Jr. |website=ArabianBusiness.com|date=17 April 2018 |language=en|access-date=10 March 2019|archive-date=19 April 2018|archive-url=https://web.archive.org/web/20180419205109/http://www.arabianbusiness.com/politics-economics/394306-saudi-arabia-leads-arab-world-in-patents|url-status=live}}</ref><ref>{{Cite web|url=http://www.arabnews.com/node/1286031/saudi-arabia|title=KSA ranks 23rd in number of patents granted by the US Patent and Trademark Office|date=17 April 2018|website=Arab News|language=en|access-date=10 March 2019|archive-date=22 June 2018|archive-url=https://web.archive.org/web/20180622083042/http://www.arabnews.com/node/1286031/saudi-arabia|url-status=live}}</ref> The number of granted patents was double that of all Arab countries combined during the same period.<ref>{{Cite web|url=https://www.businesswire.com/news/home/20180416005914/en/Saudi-Arabia-Granted-664-Patents-2017-Double|title=Saudi Arabia Granted 664 Patents in 2017; Double of All Arab Countries Combined|date=16 April 2018|website=www.businesswire.com|language=en|access-date=10 March 2019|archive-date=20 July 2018|archive-url=https://web.archive.org/web/20180720091221/https://www.businesswire.com/news/home/20180416005914/en/Saudi-Arabia-Granted-664-Patents-2017-Double|url-status=live}}</ref>

===Bureaucracy===

Business journalist Karen House criticized the Saudi bureaucracy, explaining that someone seeking to start a business in Saudi Arabia:
{{blockquote|has to complete innumerable applications and documents at multiple layers of multiple ministries, which invariably requires seeking favours from various patronage networks and accumulating obligations along the way, most probably including having to hire less-than-competent dependents of his patrons. Then, for any business of any size, government contracts, not private competition, are the financial lifeblood. So this means more patrons, more favours, and more obligations. Not surprisingly, Saudi businesses that can compete outside the protected Saudi market are few.<ref>{{cite book|author=House, Karen Elliott|title=On Saudi Arabia: Its People, Past, Religion, Fault Lines and Future|publisher=Knopf|year=2012|page=175}}</ref>}}

===Corruption===
{{further|Corruption in Saudi Arabia}}
The cost of maintaining the [[House of Saud|Royal Family]] is estimated by some to be about US$10&nbsp;billion per year.<ref name="HT2009: 44"/>

A 2005 survey by the Riyadh Chamber of Commerce found that 77% of businessmen polled felt they had to 'bypass' the law to conduct their operations. By 2012, "businessmen say it has only gotten worse".<ref name="house-167">{{cite book|author=House, Karen Elliott|title=On Saudi Arabia: Its People, Past, Religion, Fault Lines and Future|publisher=Knopf|year=2012|page=167}}</ref> Saudi Arabia has been severely criticized for failing to tackle money laundering and international terrorism financing. A report released by the [[Financial Action Task Force]] on 24 September 2018, says, "Saudi Arabia is not effectively investigating and prosecuting individuals involved in larger scale or professional [money laundering] activity" and is "not effectively confiscating the proceeds of crime".<ref>{{cite magazine|url=https://www.forbes.com/sites/dominicdudley/2018/09/25/saudi-arabia-accused-of-turning-a-blind-eye-to-international-terrorism-financing-by-global-watchdog/#2aa1fd4c6763|title=Saudi Arabia Accused of Turning A Blind Eye To International Terrorism Financing By Global Watchdog|access-date=25 September 2018|magazine=Forbes|archive-date=3 February 2019|archive-url=https://web.archive.org/web/20190203155921/https://www.forbes.com/sites/dominicdudley/2018/09/25/saudi-arabia-accused-of-turning-a-blind-eye-to-international-terrorism-financing-by-global-watchdog/#2aa1fd4c6763|url-status=live}}</ref>

===Poverty===

Estimates of the number of Saudis below the poverty line range from between 12.7%<ref name=lowWR>{{cite news|title=Saudi Arabia has tenth lowest poverty rate worldwide, says World Bank|url=http://english.alarabiya.net/en/business/economy/2013/11/03/Kingdom-has-tenth-lowest-poverty-rate-worldwide-says-World-Bank.html|access-date=2 October 2014|agency=Saudi Gazette|publisher=al-Arabiyya|date=3 November 2013|archive-date=6 December 2018|archive-url=https://web.archive.org/web/20181206103757/http://english.alarabiya.net/en/business/economy/2013/11/03/Kingdom-has-tenth-lowest-poverty-rate-worldwide-says-World-Bank.html|url-status=live}}</ref> and 25%.<ref name=Sullivan/> Press reports and private estimates as of 2013 "suggest that between 2 million and 4 million" of the country's native Saudis live on "less than about $530 a month" – about $17 a day – considered the poverty line in Saudi Arabia.<ref name=Sullivan>{{cite news|last1=Sullivan|first1=Kevin|title=Saudi Arabia's riches conceal a growing problem of poverty|url=https://www.theguardian.com/world/2013/jan/01/saudi-arabia-riyadh-poverty-inequality|access-date=2 October 2014|agency=Washington Post|newspaper=The Guardian|date=1 January 2013|quote=In a country with vast oil wealth and lavish royalty, an estimated quarter of Saudis live below the poverty line|archive-date=2 June 2016|archive-url=https://web.archive.org/web/20160602052426/http://www.theguardian.com/world/2013/jan/01/saudi-arabia-riyadh-poverty-inequality|url-status=live}}</ref><ref>A 2003 survey by the Ministry of Social Affairs found 40% of all Saudi citizens live on less than 3000 Saudi riyals ($850) a month, (source:{{cite book|author=House, Karen Elliott|title=On Saudi Arabia : Its People, past, Religion, Fault Lines and Future| publisher=Knopf|year=2012|page=159}}), while 19% of Saudis live on less than 1800 SR ([[Saudi riyal]]s) ($480) a month. (source: {{cite book|author=House, Karen Elliott|title=On Saudi Arabia: Its People, past, Religion, Fault Lines and Future|publisher=Knopf|year=2012|page=179|quote=... according to a 2003 survey by the Ministry of Social Affairs.}})</ref> 


According to [[UNESCWA]] Oman and Saudi Arabia have the highest poverty rates among [[Gulf Cooperation Council|GCC]] nations, at 10.1% and 13.6% respectively and Saudi Arabia saw a notable decline in poverty from 18.2% in 2010 to 13.6% in 2021.<ref name="UNESCWA2024">{{cite report |title=Policy Reforms to Lift Three Million GCC Nationals Out of Poverty |publisher=United Nations Economic and Social Commission for Western Asia (UNESCWA) |date=May 2024 |url=https://www.unescwa.org/sites/default/files/pubs/pdf/policy-reforms-lift-three-million-gcc-nationals-poverty-english_4.pdf |page=4|access-date=19 May 2025 |language=English}}</ref> 

The Saudi state discourages calling attention to or complaining about poverty. In December 2011, days after the [[Arab Spring]] uprisings, the Saudi interior ministry detained reporter Feros Boqna and two colleagues (Hussam al-Drewesh and Khaled al-Rasheed) and held them for almost two weeks for questioning after they uploaded a 10-minute video on the topic (''Mal3ob 3alena'', or 'We are being cheated') to YouTube.<ref>{{cite news|url=http://www.mcclatchydc.com/2011/12/04/132112/saudi-dissidents-turn-to-youtube.html|title=Saudi dissidents turn to YouTube to air their frustrations|first=Roy|last=Gutman|newspaper=McClatchy Newspapers|date=4 December 2011|access-date=16 March 2015|archive-date=23 April 2015|archive-url=https://web.archive.org/web/20150423191939/http://www.mcclatchydc.com/2011/12/04/132112/saudi-dissidents-turn-to-youtube.html|url-status=live}}</ref><ref name=youtube>{{cite web |url=https://www.youtube.com/watch?v=SlSBqgW5xx0 |title=Mal3ob 3alena: Poverty in Saudi Arabia English Version |publisher=YouTube |access-date=16 March 2015 |archive-date=10 July 2017 |archive-url=https://web.archive.org/web/20170710234543/https://www.youtube.com/watch?v=SlSBqgW5xx0 |url-status=live }}</ref> Authors of the video claim that 22% of Saudis are considered to be poor (2009) and 70% of Saudis do not own their houses.<ref>{{cite web |url=http://lebanonspring.com/2011/10/19/plot-to-show-foreign-poverty-in-foreign-saudi-arabia-arab-spring-youtube-video/ |title=A foreign Saudi plot to expose foreign poverty in foreign Saudi |work=Lebanon Spring |date=19 October 2011 |url-status=dead |archive-url=https://web.archive.org/web/20120103204944/http://lebanonspring.com/2011/10/19/plot-to-show-foreign-poverty-in-foreign-saudi-arabia-arab-spring-youtube-video/ |archive-date=3 January 2012}}</ref> 
Statistics on the issue are not available through the UN resources because the Saudi government does not issue poverty figures.<ref>{{cite news |url=https://www.npr.org/2011/05/19/136439885/poverty-hides-amid-saudi-arabias-oil-wealth |title=Poverty Hides Amid Saudi Arabia's Oil Wealth |newspaper=NPR |access-date=6 April 2018 |archive-date=25 November 2018 |archive-url=https://web.archive.org/web/20181125135147/https://www.npr.org/2011/05/19/136439885/poverty-hides-amid-saudi-arabias-oil-wealth |url-status=live }}</ref> Observers researching the issue prefer to stay anonymous<ref>{{cite web |url=http://observers.france24.com/content/20081028-poverty-exists-saudi-arabia |title=Poverty exists in Saudi Arabia too &#124; The Observers |publisher=France 24 |date=28 October 2008 |access-date=16 March 2015 |archive-date=1 April 2015 |archive-url=https://web.archive.org/web/20150401204459/http://observers.france24.com/content/20081028-poverty-exists-saudi-arabia |url-status=live }}</ref> because of the risk of being arrested, like Feras Boqna.<ref name=youtube/><ref>{{cite news |url=https://www.theguardian.com/world/2011/oct/23/feras-boqna-saudi-arabia-poverty |location=London |work=The Guardian |first=Amelia |last=Hill |title=Saudi film-makers enter second week of detention |date=23 October 2011 |access-date=14 December 2016 |archive-date=6 July 2018 |archive-url=https://web.archive.org/web/20180706132446/https://www.theguardian.com/world/2011/oct/23/feras-boqna-saudi-arabia-poverty |url-status=live }}</ref>

===Housing===

50% of Saudi Arabia's citizens owned their own home in 2017, a rise from 30% in 2011 but below the international average rate of 70%.<ref>{{Cite web|url=http://www.arabnews.com/node/1233301/saudi-arabia|title=Nearly 50% citizens own houses in Saudi Arabia|date=26 January 2018|website=Arab News|language=en|access-date=23 December 2018|archive-date=5 July 2018|archive-url=https://web.archive.org/web/20180705150709/http://www.arabnews.com/node/1233301/saudi-arabia|url-status=live}}</ref> In 2011, analysts estimated 500,000 new homes per year were needed to match the growth in Saudi population, but as of early 2014 only 300,000 to 400,000 houses per year were being built.<ref name=Sloan>{{cite web|last1=Sloan|first1=Alastair|title=Saudi Arabia's housing predicament|url=https://www.middleeastmonitor.com/articles/middle-east/10030-saudi-arabias-housing-predicament|website=Middle East Monitor|access-date=11 June 2014|ref=28 February 2014|archive-url=https://web.archive.org/web/20160304060135/https://www.middleeastmonitor.com/articles/middle-east/10030-saudi-arabias-housing-predicament|archive-date=4 March 2016|url-status=dead}}</ref>

One problem is that the government Real Estate Development Fund (REDF)—which provides 81% of all loans for housing—had an 18-year waiting list for loans due to pent-up demand. Another is that the REDF's maximum loan is 500,000 SR ($133,000), while in 2012 the average price for a small free-standing home in Riyadh is more than double that—1.23&nbsp;million SR ($328,000).<ref name=house-176>{{cite book|author=House, Karen Elliott|title=On Saudi Arabia: Its People, Past, Religion, Fault Lines and Future| publisher=Knopf |year=2012 |page=176}}</ref> However, as part of the economic reforms undertaken by the government to enhance national living standards, new funding solutions have been established to boost the mortgages for existing and new borrowers to help finance their housing plans. This was announced in August 2018 by the Minister of Housing, Mr. Majed Al-Hogail.<ref>{{Cite web|url=http://www.arabnews.com/node/1353201/business-economy|title=New mortgages to boost home ownership in Saudi Arabia|date=8 August 2018|website=Arab News|language=en|access-date=23 December 2018|archive-date=26 August 2018|archive-url=https://web.archive.org/web/20180826155145/http://www.arabnews.com/node/1353201/business-economy|url-status=live}}</ref>

A major reason for the high cost of housing is the high cost of land. In urban areas, the price of land has been bid up because nearly all of it is owned by the Saudi elite (members of the royal family or other wealthy Saudis), who have lobbied the government for land "giveaways".<ref name=Sloan/> Landlords have seen prices rocket by 50% from 2011 to 2013.<ref name=Sloan/> The owners benefit from these price increases as they hold the land for future development.<ref>{{cite book|author=House, Karen Elliott|title=On Saudi Arabia : Its People, Past, Religion, Fault Lines and Future| publisher=Knopf|year=2012|page=106|quote=A second youth video, ''Monopoly'', highlighted the near impossibility of owning a home in Saudi Arabia because a monopoly on land ownership by royals and other wealthy Saudi has put the price of land out of reach of a majority of Saudis. It struck a responsive chord in the population.}}</ref><ref name=House-151>{{cite book|author=House, Karen Elliott|title=On Saudi Arabia: Its People, Past, Religion, Fault Lines and Future| publisher=Knopf|year=2012|page=151|quote=In or around population centres, much of the open land is owned by various princes or a few wealthy families who are holding it for future development and profit.}}</ref> To deal with the key "land banking" issue, the Minister of Housing suggested in 2013 that vacant property within city limits could be subject to a tax. However, no firm plans for any tax have been unveiled.<ref name=Sloan/>

===Private sector growth===
In 2018, the imposition of a 5% [[value-added tax]] (VAT) brought private-sector growth to a halt. [[Consumer spending]] was also restrained after a sharp increase in prices for energy, electricity, and water earlier in 2018. The kingdom witnessed a mass departure of around 750,000 foreign workers after imposing new government levies on ex-pat workers. The government is also forcing small-business owners to hire Saudi nationals at comparatively higher wages than foreign workers. Gaining money from large, direct foreign investments is also not working in favor of the government. Rich Saudis are reluctant to invest within the kingdom due to the fear of triggering government scrutiny.<ref>{{cite news|url=https://www.wsj.com/articles/rising-oil-prices-are-bad-news-for-saudi-arabia-1537915829|title=Rising Oil Prices Are Bad News for Saudi Arabia|newspaper=The Wall Street Journal|access-date=25 September 2018|archive-date=4 December 2018|archive-url=https://web.archive.org/web/20181204033505/https://www.wsj.com/articles/rising-oil-prices-are-bad-news-for-saudi-arabia-1537915829|url-status=live}}</ref>

On 11 May 2020, the government announced that it would triple the kingdom's VAT on goods and services, raising it from 5% to 15%.<ref>{{cite web |url=https://cxm.co.uk/saudi-arabia-triples-on-vat-to-counter-the-economic-impact-of-covid-19/ |title=Saudi Arabia Triples on VAT to Counter the Economic Impact of COVID-19 |date=12 May 2020 |publisher=Chelsea Andrew |access-date=17 May 2020 |archive-date=22 October 2020 |archive-url=https://web.archive.org/web/20201022001345/https://cxm.co.uk/saudi-arabia-triples-on-vat-to-counter-the-economic-impact-of-covid-19/ |url-status=live }}</ref> It also stated that the increase in VAT—introduced due to the country's current [[financial crisis]] due to plummeting [[oil prices]] and impact of [[COVID-19 pandemic|coronavirus]]—would also be followed by a cut in monthly allowance for state workers worth approximately $266, and financial benefits for contractors.<ref>{{cite news|url=https://www.nytimes.com/2020/05/16/world/middleeast/saudi-arabia-coronavirus-prince.html|title=Saudi Arabia's Big Dreams and Easy Living Hit a Wall|access-date=16 May 2020|website=The New York Times|date=16 May 2020|last1=Yee|first1=Vivian|archive-date=16 May 2020|archive-url=https://web.archive.org/web/20200516151022/https://www.nytimes.com/2020/05/16/world/middleeast/saudi-arabia-coronavirus-prince.html|url-status=live}}</ref> 
Aramco decreased the production of its Arab Light grade of crude oil by a significant amount{{By how much|date=March 2023}} to be shipped to Asia. The firm also cut down oil pricing for its US buyers following wavering demand for fuel due to the global relapse of the coronavirus pandemic.<ref>{{cite news |date=5 September 2020 |title=Saudis Reduce Oil Pricing in Sign Demand Recovery Struggling |newspaper=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2020-09-05/saudis-reduce-oil-pricing-in-sign-demand-recovery-is-struggling |url-status=live |url-access=registration |access-date=5 September 2020 |archive-url=https://web.archive.org/web/20200906112519/https://www.bloomberg.com/news/articles/2020-09-05/saudis-reduce-oil-pricing-in-sign-demand-recovery-is-struggling |archive-date=6 September 2020}}</ref>

According to the [[General Authority for Statistics (Saudi Arabia)|General Authority for Statistics]], Saudi Arabia's inflation accelerated to 6.2% in August 2020, as compared to the same month last year. The report states that the annual inflation rate increased from only 0.5% (in June) to 6.1% (in July), before the increase of VAT to 15% from 5% was introduced, effective from 1 July 2020.<ref>{{cite web|url=https://www.stats.gov.sa/sites/default/files/CPI-August%202020-En-.pdf|title=Consumer Prices up 6.2% in August2020|access-date=7 August 2020|website=General Authority for Statistics(GASTAT)|archive-date=21 October 2020|archive-url=https://web.archive.org/web/20201021161720/https://www.stats.gov.sa/sites/default/files/CPI-August%202020-En-.pdf|url-status=live}}</ref>