The Kingdom of Saudi Arabia’s non-oil sector demonstrated robust growth in the second quarter of 2024, expanding by 4.4% year-on-year, according to data released by the General Authority for Statistics. Government activities also grew by 3.6% during the same period.
However, the overall Gross Domestic Product (GDP) of Saudi Arabia contracted by 0.4% in Q2-2024 compared to the same quarter in 2023, primarily due to an 8.5% decline in oil activities. This downturn in the oil sector is largely attributed to Saudi Arabia’s decision to cut crude output by 500,000 barrels per day in April 2023, a move that aligns with the OPEC+ agreement and has been extended through December 2024.
Despite the contraction in the oil sector, Saudi Arabia’s seasonally adjusted real GDP grew by 1.4% from the previous quarter, driven by the strength of its non-oil activities. This sector has become increasingly vital to the Kingdom’s economy, contributing 50% to the GDP in 2023, as highlighted by the Minister of Economy and Planning, Faisal Al-Ibrahim, in March.
The International Monetary Fund (IMF) noted that while Saudi Arabia’s economy grew by a remarkable 8.7% last year, it projects a significant slowdown to 3.1% GDP growth for 2024. The Kingdom remains focused on diversifying its economy away from oil dependency, with ongoing efforts to bolster non-oil sectors playing a crucial role in its economic strategy.
As Saudi Arabia continues to navigate the challenges posed by fluctuating oil prices and global economic dynamics, the growth in its non-oil sector offers a promising path toward sustained economic resilience and diversification.
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