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.

 

 

 



China to US: 'Market Has Spoken' after Tariffs Spur Selloff

US and Chinese flags and a label with the word "34% Tariffs" are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
US and Chinese flags and a label with the word "34% Tariffs" are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
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China to US: 'Market Has Spoken' after Tariffs Spur Selloff

US and Chinese flags and a label with the word "34% Tariffs" are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
US and Chinese flags and a label with the word "34% Tariffs" are seen in this illustration taken, April 4, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

China said on Saturday "the market has spoken" in rejecting US President Donald Trump's tariffs, and called on Washington for "equal-footed consultation" after global markets plunged in reaction to the trade levies that drew Chinese retaliation.

Several Chinese commerce associations in industries from healthcare and textiles to electronics also issued statements on Saturday calling for unity in exploring alternative markets and saying the tariffs would worsen inflation in the United States.

Hong Kong Financial Secretary Paul Chan told public broadcaster RTHK, however, Hong Kong would not impose separate countermeasures, citing the need for the city to remain "free and open".

"The market has spoken," Chinese foreign ministry spokesperson Guo Jiakun said in a post on Facebook on Saturday. He also posted a picture capturing Friday's falls on US markets, Reuters reported.

Trump introduced additional 34% tariffs on Chinese goods as part of steep levies imposed on most US trade partners, bringing the total duties on China this year to 54%.

Trump also closed a trade loophole that had allowed low-value packages from China to enter the US duty-free.

This prompted retaliation from China on Friday, including extra levies of 34% on all US goods and export curbs on some rare earths, escalating the trade war between the world's two largest economies.

Global stock markets plummeted following China's retaliation and Trump's comments on Friday that he would not change course, extending sharp losses that followed Trump's initial tariff announcement earlier in the week and marking the biggest losses since the pandemic. For the week, the S&P 500 was down 9%.

"Now is the time for the US to stop doing the wrong things and resolve the differences with trading partners through equal-footed consultation," Guo wrote in English.

China's chamber of commerce, representing traders in food products, called on "China's food and agricultural products import and export industry to unite and strengthen cooperation to jointly explore domestic and foreign markets".

Hong Kong's Chan said it strongly opposes Trump's actions and would persist in being "free and open".

"Allowing a free flow of capital and acting as a free port are our advantages, and this will not change," Chan told public broadcaster RTHK.

"The rules-based multilateral trading system is our core," he said.