Saudi Arabia’s first-quarter current account surplus widened to SAR28.6 billion ($7.6 billion) in 2024, a 75.46 percent increase from the previous quarter. According to an analysis, this was driven by strong services exports.
Services exports hit second-highest quarterly record
Data from S&P Global Market Intelligence shows that services exports in the three months to the end of March hit SAR58.7 billion ($15.64 billion), the second-highest quarterly figure on record. This follows a peak of SAR61.7 billion in Q2 2023, fueled by revenues from travel services related to the Hajj pilgrimage.
Diversifying the economy away from oil
Furthermore, Saudi Arabia has been boosting its service sector, including travel and tourism, as part of efforts to diversify its economy and reduce reliance on oil. Additionally, the country’s travel and tourism sector expanded by over 32 percent in 2023, contributing a record SAR444.3 billion to the Kingdom’s GDP, according to the World Travel and Tourism Council’s 2024 Economic Impact Research.
Tourism revenues accelerate outside of Hajj season
Moreover, S&P Global noted that the strong services exports, driven by travel services, signal a significant acceleration of tourism and travel revenues outside of the Hajj season. However, the current account surplus was dampened by a 1.2 percent decrease in Saudi Arabia’s oil exports in Q1 2024 compared to the previous quarter. In addition, this decline can be attributed to voluntary oil production cuts by OPEC+ members.
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Outlook for 2024 and the need to boost non-oil exports
Looking ahead, S&P Global expects Saudi Arabia’s current account surplus to be equivalent to 3.2 percent of GDP for the full year of 2024, based on the assumption that the Kingdom’s oil supply cuts will remain in place. The report also highlighted that Saudi Arabia should focus on increasing exports of non-oil goods to further reduce its dependence on oil, as outlined in Vision 2030.
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