Non-Oil Activities Drive Saudi Arabia’s Economic Growth

Riyadh, Saudi Arabia (SPA)
Riyadh, Saudi Arabia (SPA)
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Non-Oil Activities Drive Saudi Arabia’s Economic Growth

Riyadh, Saudi Arabia (SPA)
Riyadh, Saudi Arabia (SPA)

Non-oil activities in Saudi Arabia have driven the growth of the real gross domestic product (GDP), achieving a year-on-year increase of 2.8% by the end of the third quarter of 2024.
Quarter-on-quarter, the economy recorded a growth of 0.9%, according to data from the General Authority for Statistics (GASTAT). These figures confirm earlier rapid estimates released by the authority at the end of October.
In terms of economic activities, the non-oil sector grew by 4.3% year-on-year and 0.7% on a quarterly basis. Government activities saw a year-on-year growth of 3.1% but declined by 0.3% quarter-on-quarter. Meanwhile, oil activities recorded a marginal year-on-year growth of 0.05% and a 1.2% quarter-on-quarter increase.
Government final consumption expenditure rose by 6.2% yearly, but it contracted by 1.8% on a quarterly basis. Gross fixed capital formation grew by 4.5% year-on-year and 0.9% quarter-on-quarter. Private final consumption expenditure increased by 3.9% year-on-year and 2.8% quarter-on-quarter.
In foreign trade, imports rose by 7.3% compared to the same period last year and 3.8% on a quarterly basis. Exports grew by 3.0% year-on-year but declined by 5.7% quarter-on-quarter.
Various economic activities continued to achieve positive growth rates. Wholesale and retail trade, restaurants, and hotels recorded the highest annual growth at 5.8%, followed by financial services, insurance, and business services, which grew by 5.7%. Construction activities increased by 4.6% year-on-year.
The nominal GDP in the third quarter reached SAR 1.007 trillion, with oil and natural gas activities contributing the largest share (22.8%) to GDP. Government activities accounted for 16.1%, while wholesale and retail trade, restaurants, and hotels contributed 10.1%.
Sustained Economic Improvement
Dr. Nayef Al-Ghaith, Chief Economist at Riyad Bank, emphasized that this GDP growth is primarily due to the expansion of non-oil activities and growth across various sectors, including wholesale and retail trade, restaurants, and hotels.
Al-Ghaith noted that this growth aligns with the performance of the Purchasing Managers’ Index (PMI), which continues to exceed 50, reflecting expansion in economic activity.
He expected economic growth to persist in the fourth quarter of 2024 at levels similar to those seen in the third quarter. This optimism is fueled by continued improvements in non-oil and government activities, along with slight growth in oil activities.
He added that local demand, improvements in the global economic environment, and ongoing diversification efforts under Vision 2030 are expected to sustain economic momentum.
“This growth reflects ongoing efforts to enhance diversification and economic sustainability through investments in non-oil sectors and support for various activities,” Al-Ghaith stated, noting that these efforts will continue to drive economic growth in the coming periods, supporting the goals of Vision 2030.
World Bank Projections
The World Bank, in its Gulf Economic Update, predicted that Saudi Arabia’s real GDP would grow by 1.1% in 2024, driven by a 4.6% expansion in non-oil activities. However, it projected a 6.1% decline in oil GDP, attributed to voluntary oil production cuts.
The World Bank also forecast that growth would accelerate to an average of 4.7% in 2025 and 2026, supported by increased oil production.

 

 

 



Gulf States Expand Tourism Footprint as Emerging Markets Gain Momentum at Arabian Travel Market in Dubai

Saudi Arabia’s participation in the Arabian Travel Market (Asharq Al-Awsat) 
Saudi Arabia’s participation in the Arabian Travel Market (Asharq Al-Awsat) 
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Gulf States Expand Tourism Footprint as Emerging Markets Gain Momentum at Arabian Travel Market in Dubai

Saudi Arabia’s participation in the Arabian Travel Market (Asharq Al-Awsat) 
Saudi Arabia’s participation in the Arabian Travel Market (Asharq Al-Awsat) 

Emerging tourism markets are carving out space on the global travel map, drawing attention for their dynamic participation at the Arabian Travel Market (ATM) in Dubai, while Gulf nations—particularly Saudi Arabia and the United Arab Emirates—are accelerating their expansion in the tourism sector.

As global travel gathers momentum, Gulf-based airlines are eyeing new investment opportunities despite lingering global economic uncertainty, driven by shifting trade patterns and evolving consumer behavior in the international travel landscape.

The 32nd edition of ATM opened in Dubai with more than 2,800 exhibitors and nearly 55,000 industry professionals from 166 countries. Held under the theme “Empowering Innovation: Transforming Travel Through Entrepreneurship,” the event emphasized building a more sustainable and globally integrated travel industry.

The exhibition reflects the profound changes shaping global tourism, with cross-border and sustainable connectivity now central to the industry’s development. It also highlights the growing influence of emerging markets and the increasing role of Gulf investments in tourism and aviation.

During its participation in ATM, the Saudi Tourism Authority showcased the Kingdom’s accelerating tourism growth, revealing it had attracted approximately 116 million visitors in 2024—a 6.4% increase from the previous year. Fahd Hamidaddin, the authority’s CEO, said Saudi Arabia aims to strengthen its position as a unique summer destination through a robust calendar of events and strategic private-sector partnerships. The focus is on key source markets across the Middle East, Asia, and Africa.

UAE Tourism Supports Economic Diversification

UAE Minister of Economy and Chairman of the Emirates Tourism Council, Abdulla bin Touq Al Marri, emphasized the country’s growing stature as a global tourism hub. He pointed to the launch of major national initiatives that align with best international practices, support economic diversification, and attract investment in hospitality, aviation, and travel.

According to bin Touq, the UAE’s tourism sector continued to deliver strong performance in 2024. Hotel revenues rose to AED 45 billion (USD 12.2 billion), up 3% from 2023, while occupancy rates reached 78%, among the highest globally. The country added 16 new hotels last year, increasing the total to 1,251, with room capacity growing 3%. Hotel guests rose 9.5% year-on-year to 30.8 million, achieving 77% of the UAE’s 2031 national tourism target seven years ahead of schedule.

Gulf Airlines Gear Up for Growth

Etihad Airways CEO Antonoaldo Neves said the airline has yet to feel any major impact from global trade tensions, with seat occupancy remaining strong despite global uncertainty. Etihad plans to add 20 to 22 aircraft in 2025, with the goal of expanding its fleet to more than 170 aircraft by 2030. Neves also noted that the euro’s recent appreciation could boost European travel to the Gulf.

Etihad, which currently operates a fleet of around 100 aircraft, has significant financial flexibility, with 60% of its fleet debt-free. “If a crisis arises, we can ground planes and save up to 75% of operating costs,” he noted.

The airline plans to receive 10 Airbus A321XLR jets starting in August, in addition to 6 Airbus A350s and 4 Boeing 787s. Neves said while delays in aircraft delivery remain a challenge, they have not altered Etihad’s growth strategy. He also confirmed ongoing discussions with manufacturers and signaled interest in Boeing aircraft originally designated for China but now potentially available due to trade restrictions.

Riyadh Air Nears Major Aircraft Deal

Tony Douglas, CEO of Saudi Arabia’s Riyadh Air, said the new airline is open to acquiring Boeing jets initially built for the Chinese market if trade disputes disrupt those deliveries.

Douglas said global economic headwinds have not affected demand and announced plans to finalize a major widebody aircraft deal soon. The airline aims to expand its workforce to around 1,000 employees in the coming year, as it prepares to begin operations in the fourth quarter of 2025.

Commenting on broader regional developments, Douglas said the resumption of flights from the UAE to Syria and the use of Syrian airspace “may be an early sign that conditions are improving.”