Saudi’s non-oil economy grows at rapid pace

RIYADH: The Saudi non-oil economy continues to grow at a rapid pace, achieving an increase of 4.4 percent in 2023, amid expectations that it will accelerate to more than 5 percent in the next two years, according to reports. In parallel, the decline in oil activities by 9 percent last year led to a contraction in real GDP by 0.8 percent.

In February, Finance Minister Mohammed AlJadaan expected the Kingdom’s non-oil GDP to grow by more than 4 percent, and to exceed 5 percent in the medium term. Non-oil GDP currently represents about 60 percent of actual GDP, up from 55 percent five years ago, according to a monthly report by the Jadwa Investment Company. In comments to Asharq Al-Awsat, experts said non-oil activities are still growing at an increasing pace thanks to the Kingdom’s strategy to stimulate the private sector.

Advisor and professor of commercial law Dr Osama Al-Obaidi explained that the stability and growth of non-oil activities at 4.4 percent, as well as government activities at a rate of 2.1 percent, underscore the success of Vision 2030 in reforming and diversifying the Saudi economy, as well as increasing the flow of foreign investments, sources said.

Al-Obaidi pointed to the revival of economic sectors, such as tourism, entertainment, culture and mining, as well as renewable energy and digital technologies, in addition to developments in sports activities, which have greatly contributed to the economy and the promotion of the Kingdom as a business hub. Former member of the Shura Council and economic expert Dr. Fahd bin Jumaa told Asharq Al-Awsat that the recent numbers announced by the General Authority for Statistics (GASTAT) indicate a rising growth in non-oil activities and confirm the balance of the sector despite the decline in real gross domestic product.

According to GASTAT, the majority of economic activities achieved positive growth rates during the past year, as collective, social and personal services activities recorded the highest annual growth rates at 10.8 percent, followed by transportation, storage and communications activities with an annual growth of 7.3 percent. Wholesale and retail trade activities, restaurants and hotels registered an annual growth rate of 7 percent, followed by finance, insurance and business services with a growth of 6.8 percent, and mining and quarrying activities with a growth of 5.7 percent. Crude oil and natural gas activities decreased by 9.4 percent, while oil refining activities declined by 7.4 percent. — Agencies