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Saudi Economy Grows by 9.6% in 1st Quarter of 2022, its Highest Since 2011

A general view of Riyadh, Saudi Arabia. (SPA)
A general view of Riyadh, Saudi Arabia. (SPA)
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Saudi Economy Grows by 9.6% in 1st Quarter of 2022, its Highest Since 2011

A general view of Riyadh, Saudi Arabia. (SPA)
A general view of Riyadh, Saudi Arabia. (SPA)

The General Authority for Statistics (GASTAT) published flash estimates of the Saudi Gross Domestic Product (GDP) growth rate for the first quarter of 2022, reported the Saudi Press Agency.

The figures reveal that the GDP has made the highest growth rate in 10 years, achieving a growth of 9.6% during the first quarter of 2022 compared to the same period in 2021.

This was driven by a significant increase in oil activities by 20.4%, in addition to an increase in non-oil activities by 3.7% and an increase in government services activities by 2.4%.

The figures showed that the seasonally adjusted real GDP in the Kingdom grew by 2.2% in the first quarter of 2022 compared to the previous year.

This increase was due to the positive growth in oil activities by 2.9%, and an increase in non-oil activities by 2.5%, while government services activities decreased by 0.9%.

According to the Methodology of Flash Estimates of Quarterly GDP Definition, a flash estimate of quarterly GDP is defined as a process of estimating the quarterly national accounts conducted during a short period after the end of the reference quarter and is published 30 days after the end of the reference quarter when the data relating to the quarter is still incomplete.

It is the same estimates that are performed in the quarterly national accounts, but it adopts simplified assumptions about the extrapolation of some indicators (monthly or quarterly). It uses many indicators related to production, expenditures, income, price, and foreign trade.

Flash estimates are related to the quarterly GDP of the entire national economy and are presented without any details of economic sectors and activities.

They are used by decision-makers, academics, and researchers who seek to obtain a long-term future view of the GDP data for economic activities. International organizations use seasonally adjusted data to make economic comparisons between different countries.

GASTAT is the official and only statistical reference for statistical data and information in the Kingdom. It implements all statistical activities, technical supervision of the statistical sector, design and implementation of field surveys, conduct of statistical studies and research, data and information analysis.

It is responsible for all work of documenting and preserving information and statistical data that covers, documents, classifies and analyzes all activities in the Kingdom from its various sources and extracts its statistical indicators.

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Business

Saudi Business and Job Growth Hit 14-Year High

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)
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Saudi Business and Job Growth Hit 14-Year High

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)

Business conditions in Saudi Arabia’s non-oil private sector improved notably in June, driven by a marked rise in customer demand and expanded production, according to the latest Riyad Bank Purchasing Managers’ Index (PMI) data.

New business volumes surged, fueling the fastest pace of employment growth since May 2011. This strong demand for workers pushed wage costs to record highs, adding pressure on overall expenses and contributing to a fresh increase in output prices.

The headline PMI climbed to 57.2 in June from 55.8 in May - its highest level in three months and slightly above the long-term average of 56.9. The reading signaled a robust improvement in the health of the non-oil private sector economy.

Companies reported another rise in new orders last month, with growth accelerating following a recent low in April. Many firms cited gaining new clients, alongside improved marketing efforts and stronger demand conditions. Domestic sales were the main driver of the increase, while export sales edged up slightly.

Purchasing Activity Expands

Production continued to expand through the end of Q2, although growth slowed to a 10-month low. Purchasing activity picked up sharply as companies sought to secure additional inputs to meet rising demand, with the pace of purchase growth reaching its fastest in two years.

Employment growth accelerated as businesses rapidly expanded their workforce to keep pace with incoming orders, pushing hiring to the highest level since mid-2011. This strong recruitment trend, which began early in 2025, was largely driven by a rising need for skilled workers, prompting companies to increase salary offers. Consequently, overall wage costs rose at the fastest rate since the PMI survey started in 2009.

Facing mounting cost pressures from higher raw material prices, firms raised their selling prices sharply in June , the biggest increase since late 2023, reversing declines recorded in two of the previous three months. This price hike largely reflected the passing of higher operating costs onto customers, although some companies opted for competitive pricing strategies by cutting prices.

Resilient Economic Outlook

Looking ahead, non-oil private sector firms remained confident about business activity over the next 12 months. Optimism hit a two-year high, supported by resilient domestic economic conditions, strong demand, and improved sales. Supply-side conditions also showed positive momentum, with another strong improvement in supplier performance.

Dr. Naif Alghaith, Chief Economist at Riyad Bank, said: “Future expectations among non-oil companies remain very positive. Business confidence reached its highest level in two years, underpinned by strong order inflows and improving local economic conditions.”

He added: “However, cost pressures became more pronounced in June, with wage growth hitting record levels as companies compete to retain talent. Purchasing prices also rose at the fastest pace since February, partly driven by increased demand and geopolitical risks. Despite these challenges, companies broadly raised selling prices to recover from May’s declines, reflecting an improved ability to pass higher costs onto customers.”