Saudi Arabia’s Non-Oil Growth boosted by wholesale, retail, and hospitality, driving GDP expansion: GASTAT

Saudi Arabia’s Non-Oil Growth continues to reflect the Kingdom’s economic diversification efforts under Vision 2030, with the non-oil sector expanding by 4.8% year-on-year in Q3 2024, according to GASTAT. This growth was driven by strong performances in wholesale and retail trade, restaurants, and hotels, which recorded a 5.8% increase compared to the same period last year.

Financial, insurance and business services also played a pivotal role, growing by 5.7%, while the construction sector expanded by 4.6%. The transport, storage, and communication industries weren’t far behind, registering a 4.5% increase during the quarter.

Such progress underscores the importance of non-oil activities in Saudi Arabia’s broader economic landscape. These sectors now account for 52% of the Kingdom’s GDP, as highlighted by Minister of Economy and Planning Faisal Al-Ibrahim at the recent World Investment Conference.

Saudi Arabia’s real GDP grew by 2.8% year-on-year in Q3, reaching SAR 1.00 trillion ($270 billion) at current prices. Crude oil and natural gas maintained their dominance, contributing 22.8% to the GDP, followed by government activities (16.1%) and non-oil trade and hospitality sectors (10.1%).

However, while government activities grew by 3.1% year-on-year, they saw a slight quarter-on-quarter decline of 0.3%. Similarly, the oil sector recorded modest growth, with a 0.5% year-on-year and 1.2% quarter-on-quarter increase.

Government final consumption expenditure rose by 6.2% compared to last year but contracted by 1.8% quarter-on-quarter. Investments, measured through gross fixed capital formation, grew by 4.5% year-on-year and 0.9% quarter-on-quarter, reflecting steady economic activity.

Trade dynamics also showed mixed trends. Imports surged by 7.3% year-on-year and 3.8% quarter-on-quarter, while exports increased by 3% compared to Q3 2023 but fell by 5.7% from the previous quarter.

Saudi Arabia’s Vision 2030 aims to reduce reliance on oil and build a more diversified economy. The steady growth of non-oil sectors indicates the success of these initiatives, positioning the Kingdom for long-term sustainability and economic resilience.