Saudi economy grew 3.8% in Q1 driven by rise in non-oil activities
Most economic activities in the Kingdom recorded positive growth on an annual basis: report
Saudi Arabia’s real gross domestic product grew by 3.8 percent year over year in the first quarter of 2023, primarily driven by expansion in non-oil activities, according to a report released by the General Authority for Statistics.
The GASTAT report noted that the Kingdom’s non-oil activities expanded by 5.4 percent in the first three months of 2023 compared to the same period a year ago. The growth of non-oil activities was 1 percent when compared with the last quarter of 2022.
Strengthening the non-oil private sector is the key part of the Kingdom’s economic diversification efforts under the goals outlined in Vision 2030.
According to the GASTAT report, the Kingdom’s real GDP decreased by 1.4 percent in the first quarter of 2023 compared to the last quarter of the previous year.
The report noted that oil activities rose by 1.4 percent year on year, but it dropped by 4.7 percent quarter on quarter.
The government services activities also soared by 4.9 percent in the first quarter compared to the same period a year ago.
The GASTAT report said that most economic activities in the Kingdom recorded positive growth on an annual basis in the first quarter of 2023. This includes community, social and personal services activities that grew at the highest pace of 12.9 percent year on year.
This was followed by transport, storage and communication activities that rose by 9.3 percent annually.
Saudi Arabia’s wholesale and
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retail trade, restaurant and hotel activities also grew by 7.5 percent, the report added.
Earlier in January, Kristalina Georgieva, managing director of the International Monetary Fund, said that Saudi Arabia is an economic bright spot in the world at this time when several countries are facing economic challenges. An IMF mission to Saudi Arabia in May noted that the Kingdom’s non-oil sector is predicted to grow at an average of 5 percent in 2023. The Washington-based lender also lauded the structural reforms which are happening in the Kingdom, in line with Vision 2030.
In May, Saudi Arabia’s Purchasing Managers’ Index stood at 58. 5, revealed the Riyadh Bank’s PMI report, indicating strong growth in the non-oil private sector.
IMF noted that Saudi Arabia has witnessed remarkable progress in digitization, regulatory and business environment, and women’s participation in the workforce. According to the lender, Saudi Arabia is the fastest-growing economy among the G20 nations, and pointed out that the Kingdom has made remarkable progress in reducing unemployment rate.
IMF also lauded Saudi Arabia’s efforts to go net-zero, and it welcomed various initiatives of the Kingdom to go sustainable which include the increased use of renewable energy, embracing carbon capture and storage technology, along with the ambitious plan to become the world’s largest hydrogen exporter.