IMF: Saudi Arabia made impressive progress in digital transformation…GCC countries succeeded in closing the gap with developed countries

A recent study by the International Monetary Fund revealed that Saudi Arabia has made impressive progress in digital transformation during the 2023 targets of the Saudi Information and Communications Sector Strategy, particularly in the years following the launch of the Kingdom’s Vision 2030. The study cited the achievement of 11 out of 15 indicators for job localization in the sector and the rate of internet penetration. According to the study, titled “Digital Transformation in the Economies of the Gulf Cooperation Council Countries,” the Kingdom was able to increase the digital economy’s contribution to GDP from 11.5% in 2018 to 14% in 2022. Furthermore, the percentage of the population using the internet in Saudi Arabia increased significantly from 68.5% in 2015 to 99% in 2023.

The study confirmed that digitization in Saudi Arabia was an important driver of economic resilience during the COVID-19 pandemic. The Kingdom was able to enhance this resilience thanks to its efficient transition to a digital model, supported by an advanced communications network during the COVID-19 pandemic. This enabled approximately 98% of students to join online education platforms—a percentage significantly higher than the global average of 50% estimated by the United Nations Educational, Scientific and Cultural Organization (UNESCO). Furthermore, more than 95% of companies were able to efficiently transition to online operations. Regarding the Gulf Cooperation Council (GCC) countries as a whole, the study revealed that GCC countries have pursued ambitious digital strategies as part of their economic transformation plans, amid a significant acceleration in the region’s digital transformation, particularly since the onset of the COVID-19 pandemic. These efforts have included enhancing digital infrastructure, digital government, and digital transformation in the financial services sector.

The study concluded that GCC countries have succeeded in bridging the gap with developed countries in the digital access index by enhancing digital infrastructure and affordability.

The study found a positive relationship between progress in digitalization and progress in financial inclusion, banking sector resilience during crises, improving government effectiveness, and accelerating the recovery of the corporate sector following economic downturns.

The study also found a positive relationship between digitalization and economic growth. It indicated additional economic gains from enhancing digital transformation in GCC countries, which requires comprehensive strategies to further leverage digital transformation, enhance digital skills, and digital adoption, along with adequate social safety nets and appropriate training to enhance social protection and labor market integration, and create an environment conducive to further digital penetration. While the study commended the digital progress made by GCC countries, it highlighted uneven digitization progress across various sectors, calling for further efforts, particularly with the rise of artificial intelligence.