Saudi Arabia’s non-oil economy continued to power growth in the second quarter of 2025, cementing its role as the main engine of expansion as the Kingdom pushes ahead with efforts to diversify away from hydrocarbons.
The economy grew 3.9% year on year in the quarter, lifted largely by non-oil activities that contributed 2.6 percentage points to overall growth, data from the General Authority for Statistics showed on Monday.
Non-oil GDP rose 4.6% in the three months to June, marking the sixth consecutive quarter of positive expansion. The sector accounted for half of Saudi output for the first time in 2023, a milestone under the government’s diversification agenda.
Oil GDP increased 3.8% in the second quarter, while government activities rose 0.6%. On a quarterly basis, seasonally adjusted GDP grew 1.7%, driven mainly by a 5.6% rebound in oil activity. Non-oil GDP expanded 0.8% from the first quarter, while government activity fell 0.8%.
Saudi crude production climbed 6% year on year in June to 9.36 million barrels per day after OPEC+ boosted output from April, the data showed.
Private sector boost
Economists said the sustained non-oil momentum underscored Riyadh’s commitment to economic diversification and resilience against oil price swings.
“The fifth straight quarter of non-oil growth is a strong sign of the success and sustainability of diversification away from oil market volatility,” said Fahd bin Jumaa, a former Shura Council member and economist. He told Asharq Al-Awsat that non-oil activity has become a “core driver” of growth in line with the Vision 2030 plan.
The rebound in oil alongside steady non-oil expansion reflects “successful diversification” and tangible progress in Saudi targets, supported by heavy government efforts to empower the private sector as a key partner, he said.
Investment push
Economic researcher Fadwa al-Buwardi said the non-oil sector’s performance highlighted the government’s focus on developing new industries and attracting capital.
“The continuous growth of non-oil activities shows the economy’s ability to shift towards more resilience and sustainability, with less dependence on oil and stronger local and foreign investment,” she told Asharq Al-Awsat.
She added that benefits include job creation across multiple sectors, higher GDP, improved non-oil exports and stronger capital inflows. Sustained balance, she said, sends positive signals on liquidity and future investment opportunities, especially given rising foreign inflows.
Outlook
Analysts say the performance reinforces confidence that Saudi Arabia is on track to meet Vision 2030 targets. Non-oil strength, alongside investment inflows and private sector expansion, not only reflects successful diversification, but also signals to global markets that the Kingdom’s economy is becoming more resilient to shocks.
With continued momentum in both domestic and foreign investment in non-oil industries, Saudi Arabia is positioning itself as a regional economic powerhouse capable of building a more sustainable and diversified future.
