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Saudi economy grows 4.4% in Q4, non-oil sector drives expansion
Non-oil exports saw an 18.1% year-on-year increase in December, largely fueled by a 13.8% rise in chemical product exports.
Saudi Arabia’s economy recorded its strongest growth in two years, expanding by 4.4% year-on-year in the fourth quarter of 2024, according to estimates from the General Authority for Statistics (GASTAT). The surge was driven by a 4.6% rise in non-oil GDP, while the oil sector grew by 3.4%.
However, the widening budget deficit remained a concern. Al Rajhi Capital reported a $15.38 billion shortfall in Q4 2024, up from $8.05 billion in the previous quarter, driven by a 15.4% year-on-year decline in government revenues to $80.7 billion. Meanwhile, expenditures fell by 8.7% to $96.1 billion.
Despite fiscal challenges, Saudi Arabia’s non-oil sector maintained strong momentum. Non-oil exports jumped 18.1% year-on-year in December, fueled by a 13.8% increase in chemical product exports.
The non-oil private sector also saw its fastest expansion in a decade, with the Purchasing Managers’ Index (PMI) climbing to 60.5 in January 2025, driven by a sharp increase in new orders and business activity.
Consumer spending remained strong, rising 11.1% year-on-year to $33.86 billion in January 2025. E-commerce posted exceptional growth of 44.6% year-on-year, with jewelry and clothing/footwear seeing the highest gains in point-of-sale transactions.
Inflation remained contained, with the Consumer Price Index (CPI) rising 1.97% year-on-year in January, largely due to higher rental costs. Meanwhile, the Wholesale Price Index (WPI) recorded a modest 0.86% increase.
In the energy sector, Saudi oil production averaged 8.94 million barrels per day in January 2025, slightly lower than the previous month, while crude oil exports also saw a minor decline. Brent crude prices dropped by an average of 2.8% in February, reflecting concerns over the global economic outlook.
Industrial activity continued to grow, with the Index of Industrial Production (IIP) rising 2.1% year-on-year in December, led by gains in manufacturing. Credit growth remained strong, expanding by 14.7% year-on-year in January 2025, primarily driven by corporate lending.
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