Now accepting applications for Fast Company Middle East’s Most Innovative Companies. Click here to apply.
In the second quarter of 2023, Saudi Arabia’s real GDP experienced a year-on-year growth of 1.2%, primarily attributed to a substantial 6.1% expansion within the non-oil sector, as the General Authority for Statistics (Gastat) reported. This growth in the non-oil sector exceeded Gastat’s initial projection of a 5.5% increase for the three-month period ending in June.
According to Gastat’s recent announcement, Saudi Arabia’s GDP at current prices reached $258.66 billion during the three months ending in June. The country’s economic growth in the second quarter outpaced the preliminary estimate released in July by 0.1 percentage points.
The oil and gas sector emerged as the leading contributor to Saudi Arabia’s economy, constituting 25% of the Kingdom’s GDP. Following closely, government services significantly contributed 15.6%, with wholesale and retail trade, restaurants, and hotels contributing 9.7%.
Government services experienced a notable annual increase of 2.3%, contributing positively to the overall economic growth, as indicated by Gastat data.
Transport, storage, and communication sectors exhibited the most substantial growth rates, expanding by 12.9% on a year-on-year basis and 3.1% on a quarter-on-quarter basis. Similarly, community, social, and personal services activities demonstrated growth, with a 9% yearly increase and a 2.3% quarterly rise.
Gastat noted that most economic activities registered positive growth rates during the second quarter of 2023.
In Q2 2023, Saudi Arabia’s GDP contracted by 0.2%, primarily due to a decline in oil-related activities. This contraction follows the impressive economic growth of 8.7% Saudi Arabia achieved in 2022, making it the fastest-growing economy among the G20 nations.
Earlier this year, Saudi Arabia experienced the largest downgrade in economic growth among all G20 nations. The economic forecast was reduced to 1.9% for 2023, down from the previous estimate of 3.1%, primarily due to production cuts and lower oil prices. However, growth is expected to rebound to 2.8% in 2024.
The IMF stated on Wednesday that Saudi Arabia’s growth outlook remains positive. This positivity is primarily attributed to the country’s robust non-oil economic growth momentum, which is anticipated to persist throughout the year.
“The output gap is estimated to have closed during 2022, with the non-oil growth momentum continuing in 2023,” the IMF executive board said.
Loading the player...
Issam Kazim on Dubai's quest to be the world's most visited destination | PART 1