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Saudi Aviation Sector Contributes $53 Bln to Economy

A civilian aircraft flies over the skies of the Saudi capital (Riyadh Air)
A civilian aircraft flies over the skies of the Saudi capital (Riyadh Air)
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Saudi Aviation Sector Contributes $53 Bln to Economy

A civilian aircraft flies over the skies of the Saudi capital (Riyadh Air)
A civilian aircraft flies over the skies of the Saudi capital (Riyadh Air)

Saudi Arabia’s civil aviation sector is playing a crucial role in driving the Kingdom’s economic growth, contributing $53 billion to the Gross Domestic Product (GDP), according to the Saudi General Authority of Civil Aviation (GACA).

This data was revealed in the inaugural 2024 State of Aviation Report, which GACA will launch at the Future Aviation Forum, detailing the contribution of the aviation sector to Saudi Arabia’s economic development and Vision 2030 transformation program.

The forum, held under the patronage of King Salman bin Abdulaziz, will take place from May 20-22 in Riyadh.

Transport Minister and Chairman of GACA Saleh Al-Jasser emphasized the significant strides made by Saudi Arabia’s aviation sector in international metrics, aligning with the transformative goals of Vision 2030 and the National Transport and Logistics Strategy.

These advancements offer unprecedented opportunities in the aviation sector.

The report, developed by GACA in line with its strategic regulatory mandate, highlights that the Saudi aviation sector contributes $20.8 billion through aviation-related activities, enabling a further estimated $32.2 billion in tourism economic activity.

Moreover, aviation supports 241,000 jobs, and a further estimated 717,000 jobs in the tourism sector.

The report also captures the transformation of Saudi aviation, with Saudi Arabia outperforming global aviation sector growth rates in 2023 – achieving 123% of international pre-pandemic seat capacity compared with a global and regional average recovery rate of 90% and 95% respectively, with 2023 growth amounting to 26% as total passenger volumes reached 111.7 million.

Hosted by GACA under the patronage of the Custodian of the Two Holy Mosques King Salman, the Future Aviation Forum will showcase investment opportunities exceeding $100 billion, aimed at realizing Vision 2030 objectives to position Saudi Arabia as a leading logistics hub in the Middle East.

This includes $50 billion in airport investments and nearly $40 billion in new aircraft orders, with the remaining $10 billion allocated to various projects, including $5 billion for logistics zones at major airports in Riyadh, Jeddah, and Dammam.

The event will convene more than 5,000 aviation experts and leaders from more than 100 countries to shape the future of aviation, including executives from international carriers, all major global manufacturers, airport executives, industry leaders and regulators.

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US Economy Grew at Solid 3% Rate Last Quarter, Government Says in Final Estimate

FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
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US Economy Grew at Solid 3% Rate Last Quarter, Government Says in Final Estimate

FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - The New York Stock Exchange, at rear, is shown on Sept. 24, 2024, in New York. (AP Photo/Peter Morgan, File)

The American economy expanded at a healthy 3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said Thursday, leaving its previous estimate unchanged.
The Commerce Department reported that the nation's gross domestic product — the nation's total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year, The Associated Press reported.
Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace, down slightly from the 2.9% rate the government had previously estimated. Business investment was also solid: It increased at a vigorous 8.3% annual pace last quarter, led by a 9.8% rise in investment in equipment.
The final GDP estimate for the April-June quarter included figures showing that inflation continues to ease, to just above the Federal Reserve’s 2% target. The central bank’s favored inflation gauge — the personal consumption expenditures index, or PCE — rose at a 2.5% annual rate last quarter, down from 3% in the first quarter of the year. Excluding volatile food and energy prices, so-called core PCE inflation grew at a 2.8% pace, down from 3.7% from January through March.
The US economy, the world's biggest, displayed remarkable resilience in the face of the 11 interest rate hikes the Fed carried out in 2022 and 2023 to fight the worst bout of inflation in four decades. Since peaking at 9.1% in mid-2022, annual inflation as measured by the consumer price index has tumbled to 2.5%.
Despite the surge in borrowing rates, the economy kept growing and employers kept hiring. Still, the job market has shown signs of weakness in recent months. From June through August, America's employers added an average of just 116,000 jobs a month, the lowest three-month average since mid-2020, when the COVID pandemic had paralyzed the economy. The unemployment rate has ticked up from a half-century low 3.4% last year to 4.2%, still relatively low.
Last week, responding to the steady drop in inflation and growing evidence of a more sluggish job market, the Fed cut its benchmark interest rate by an unusually large half-point. The rate cut, the Fed’s first in more than four years, reflected its new focus on shoring up the job market now that inflation has largely been tamed.
Some other barometers of the economy still look healthy. Americans last month increased their spending at retailers, for example, suggesting that consumers are still able and willing to spend more despite the cumulative impact of three years of excess inflation and high borrowing rates. The nation’s industrial production rebounded. The pace of single-family-home construction rose sharply from the pace a year earlier.
And this month, consumer sentiment rose for a third straight month, according to preliminary figures from the University of Michigan. The brighter outlook was driven by “more favorable prices as perceived by consumers” for cars, appliances, furniture and other long-lasting goods.
A category within GDP that measures the economy’s underlying strength rose at a healthy 2.7% annual rate, though that was down from 2.9% in the first quarter. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.
Though the Fed now believes inflation is largely defeated, many Americans remain upset with still-high prices for groceries, gas, rent and other necessities. Former President Donald Trump blames the Biden-Harris administration for sparking an inflationary surge. Vice President Kamala Harris, in turn, has charged that Trump’s promise to slap tariffs on all imports would raise prices for consumers even further.
On Thursday, the Commerce Department also issued revisions to previous GDP estimates. From 2018 through 2023, growth was mostly higher — an average annual rate of 2.3%, up from a previously reported 2.1% — largely because of upward revisions to consumer spending. The revisions showed that GDP grew 2.9% last year, up from the 2.5% previously reported.
Thursday’s report was the government’s third and final estimate of GDP growth for the April-June quarter. It will release its initial estimate of July-September GDP growth on Oct. 30.