Saudi Gazette report

RIYADH — Saudi Arabia’s non-oil economic activities recorded a growth of 4.9 percent year-on-year in the second quarter of 2024, beating late July estimates of 4.4 percent. This growth rate is the highest in a year, according to data from the General Authority for Statistics (GASTAT). It was 3.4 percent in Q1 of 2024, and 4.2 percent and 3.2 percent in Q4 and Q3 of 2023 respectively.

The GASTAT report showed that the seasonally adjusted real GDP in the second quarter of 2024 increased by 1.4 percent compared to the first quarter of 2024. The real GDP decreased by 0.3 percent in the second quarter of 2024 compared to the same period of 2023, affected by the 8.9 percent decline in oil activities.

The non-oil activities achieved a growth of 4.9 percent year-on-year and 2.1 percent quarter-on-quarter. In contrast, the performance of oil activities contracted by 8.9 percent year-on-year, compared to July estimates of 8.5 percent, while achieving an increase of 0.9 percent quarter-on-quarter. Government activities achieved a growth of 3.6 percent year-on-year, and 2.3 percent quarter-on-quarter, the report pointed out.

According to GASTAT, electricity, gas and water activities posted an increase of 8.9 percent year-on-year while wholesale and retail trade, restaurants, and hotels grew by 6.8 percent.

The International Monetary Fund, in its recent report on the results of the Article IV Consultations, expected that the momentum of non-oil GDP growth would remain strong. The IMF noted that the momentum of non-oil reform will increase again in 2025 with a recovery in investment, especially from the Public Investment Fund, which is expected to increase its investments in 2025 from $40 billion to $70 billion annually and in the lead-up to the 2027 Asian Cup, the 2029 Asian Winter Games, and the 2030 World Expo. It believed that full implementation of the national investment strategy could boost non-oil GDP growth to 8 percent.

The Saudi authorities, for their part, expect non-oil growth to remain at 4 percent in 2024, expressing confidence that implementing Vision 2030 will help sustain potential non-oil growth in the medium and long term, according to what they told the Fund's Article IV mission.