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.
