Saudi Arabia’s real gross domestic product (GDP) grew by 2.8 percent annually in the third quarter of 2024 while the seasonally adjusted real GDP grew by 0.9 percent compared to the second quarter of 2024.
In its latest report, the General Authority for Statistics (GASTAT) attributed the Kingdom’s economic expansion in the previous quarter to a 4.3 percent annual rise and a 0.7 percent quarterly rise in non-oil activity. The report revealed that government activities grew by 3.1 percent annually while oil activities recorded a slight growth of 0.05 percent annually and 1.2 percent compared to the second quarter of 2024.
Non-oil sectors propel growth
Growth in most economic activities contributed to the rise in Saudi Arabia’s real GDP last quarter. Wholesale and retail trade, restaurants, and hotel activities achieved the highest growth rate in Q3 of 2024, rising 5.8 percent annually and 1.9 percent compared to Q2.
Financial, insurance and business services activities followed with a growth of 5.7 percent annually and 2 percent quarter-on-quarter. Additionally, construction activities grew by 4.6 percent annually and 0.9 percent quarter-on-quarter.
Saudi Arabia’s GDP at current prices reached SAR1.007 trillion in Q3 of 2024. Crude oil and natural gas activities achieved the highest contribution to the GDP at 22.8 percent, followed by government activities at 16.1 percent, and wholesale and retail trade, restaurants, and hotels activities with a contribution of 10.1 percent.
Government final consumption expenditure grew by 6.2 percent annually while gross fixed capital formation increased by 4.5 percent. GASTAT also revealed that private final consumption expenditure grew by 3.9 percent. As for the trade balance, imports increased by 7.3 percent annually while exports grew by 3 percent.
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Saudi Arabia’s GDP to accelerate in 2025
The International Monetary Fund further lowered its GDP growth forecast for Saudi Arabia for 2024 to 1.5 percent and estimated growth to accelerate to 4.6 percent next year in its latest World Economic Outlook Report. The Kingdom is the world’s top oil exporter and its public finances remain largely reliant on revenue from hydrocarbons. However, it has accelerated efforts to bolster non-oil growth and develop new income streams under its economic diversification plan Vision 2030.
The IMF also projects oil prices to rise by 0.9 percent in 2024 to about $81 a barrel. It has previously said that Saudi Arabia needs prices at around $100 per barrel to balance its budget.
In the second quarter of 2024, Saudi Arabia’s non-oil activities expanded by 4.9 percent annually. Meanwhile, the seasonally adjusted GDP increased by 1.4 percent compared to Q1. However, the Kingdom’s GDP saw an annual decline of 0.3 percent in the same period, mainly due to an 8.9 percent decline in oil activities following the decision to cut crude output in line with OPEC+ agreements.
