Non-oil activities in Saudi Arabia have maintained their growth momentum in Q3 of 2023, registering a 3.6% increase despite a decline from Q2.
This reflects the success of the Kingdom’s diversification of income sources, moving away from oil, which is a key objective of Saudi Arabia’s national transformation plan, Vision 2030.
Meanwhile, the local GDP contracted by 4.5% in Q3, largely attributed to a 17.3% decrease in oil activities.
Experts have confirmed to Asharq Al-Awsat that the continued growth of non-oil activities affirms the success of the Saudi government’s policy to diversify income sources and not rely on oil.
This is achieved by supporting the local private sector, stimulating the export of national products and services to international markets, and continuing to implement large-scale development projects.
Rapid estimates from the General Authority for Statistics (GASTAT) revealed that the local GDP decreased by 4.5% in Q3 compared to the same period in 2022, primarily due to the contraction of oil activities by 17.3% (the second consecutive quarterly contraction), despite the rise in non-oil activities, as well as a 1.9% growth in government activities.
The seasonally adjusted annualized GDP declined by 3.9% in Q3 of 2023 compared to Q2, influenced by an 8.4% decrease in oil activities and a 5.3% decline in government activities, while non-oil activities achieved a marginal 0.1% increase on a quarterly basis.
The non-oil economy in Saudi Arabia experienced a growth rate of 6.1% during the second quarter of 2023, leading the Kingdom to revise its estimates for the overall GDP growth to 1.2% in the second quarter, up from the previous preliminary estimate of 1.1%.
Last week, Saudi Finance Minister Mohammed Al-Jadaan said the Kingdom is no longer focusing on GDP numbers but instead on the development of the non-oil sector.
He anticipated that the non-oil GDP for 2023 will conclude with a growth rate of around 6%.
Economic expert Ihsan Bouhliqa told Asharq Al-Awsat that the decline in the GDP growth rate in Q3 of 2023, compared to the same period in 2022, and the 3.17% slowdown in the oil sector’s growth, are the result of voluntary reductions in Saudi oil production.
Bouhliqa explained that non-oil activities have been consistently growing without interruption for the eleventh consecutive quarter since the beginning of 2021, with a quarterly growth rate ranging from 10% in Q2 of 2021 to 3.6% in Q3 of 2023.
