The growth in non-oil sectors indicates a strategic shift in Saudi Arabia's economic focus, aiming to reduce dependence on oil revenues.
The projected economic recovery in 2024 and 2025 reflects the government's commitment to diversifying its economy and investing in mega projects.
If the current trends continue, Saudi Arabia could see sustained economic growth beyond 2025, particularly if non-oil sectors continue to thrive.
The government's focus on mega projects may lead to increased foreign investment and job creation in the coming years.
Saudi Arabia's economy grew by 2.8% year-on-year in the third quarter of 2024, driven by a significant increase in non-oil activities, according to the General Authority for Statistics. This growth aligns with preliminary data released in October and marks a recovery following a contraction of 0.4% in the second quarter, which was largely influenced by an 8.5% decline in the oil sector. Non-oil output saw a notable rise of 4.3% compared to the same period last year, while government activities grew by 3.1%. In contrast, the oil sector experienced minimal growth of 0.05%. Quarter-on-quarter, real GDP increased by 0.9% in the third quarter.
The Saudi government anticipates a GDP growth of 0.8% for the entire year of 2024, following a contraction in 2023. The finance ministry projects a robust acceleration in economic growth to 4.6% in 2025, primarily fueled by enhanced non-oil activities. This optimistic outlook is supported by the recent approval of a budget for 2025, which includes a projected deficit of 101 billion riyals ($26.88 billion). Total spending is expected to reach approximately 1.285 trillion riyals ($342.05 billion), with revenues estimated at 1.184 trillion riyals ($315.17 billion).
