Saudi Arabia's non-oil sector records robust 3.6% growth in
Q3
Despite a decline in the second quarter, Saudi Arabia's
non-oil sector demonstrated strong growth of 3.6% in the third quarter of 2023,
according to recent data released by the General Authority for Statistics
(GASTAT).
This growth figure underscores the continued success of
Saudi Arabia's policy to diversify its sources of income away from oil,
aligning with the goals of Saudi Vision 2030. During the same period,
oil-related activities saw a decline of 17.3%, leading to a 4.5% decrease in
the Kingdom's seasonally adjusted real GDP for the third quarter.
Saudi
rulers’ vision standing out as an example of successful economic
diversification
In the third quarter, non-oil activities in the Kingdom
increased by 0.1% compared to the previous quarter, while government activities
grew by 1.9%. The gross domestic product (GDP) had reached 1.2% in the second
quarter of the year, marking the first contraction of the Saudi economy since
the first quarter of 2021.
However, the seasonally adjusted GDP decreased by 3.9% in
the third quarter, compared to the second quarter, primarily due to an 8.4%
decrease in oil-related activities and a 5.3% decrease in government
activities. Non-oil activities managed to achieve a modest 0.1% increase on a
quarterly basis.
IMF:
Saudi Arabia's economic growth driven by diversification efforts
During the second quarter of 2023, the non-oil economy in
Saudi Arabia grew at a rate of 6.1%, prompting the Kingdom to revise its GDP
growth estimates to 1.2% for that quarter, up from the previous preliminary
estimate of 1.1%.
Saudi Finance Minister Mohammed Al-Jadaan emphasized that
the Kingdom is now placing more importance on the development of the non-oil
sector rather than just focusing on GDP numbers. He expects the non-oil GDP to
experience approximately 6% growth by the end of the current year, emphasizing
that the non-oil GDP's growth is healthy and likely to continue in the medium
term.
The Saudi Ministry of Finance's latest forecasts for the
2024 budget's preliminary statement indicate that non-oil activities are
expected to grow at a rate of 5.9% during the current year. The ministry
reduced its economic growth expectations from 3.1% to 0.03%, primarily
attributing this decline to the voluntary reduction of the Kingdom's oil
production.
Saudi
economy's surge over US$1 trillion mark attributed to structural reforms
Saudi Crown Prince and Prime Minister Mohammed bin Salman
highlighted the significant contribution of the non-oil sector to the Kingdom's
GDP during an interview in September. He noted that this contribution helped
the Saudi economy achieve the highest growth rate in 2022 among G20 countries.
In 2023, the non-oil sector continued to record the second-highest growth rate
within the group, indicating healthy competition, particularly with India.
The International Monetary Fund (IMF) recently commended the
reforms initiated by Saudi Arabia as part of Vision 2030, acknowledging the
sustained momentum in the non-oil sector despite an overall growth decline. The
IMF anticipates that Saudi Arabia's non-oil economic sectors will maintain
strong growth, with a projected rate of up to 4.9% in 2023, driven by domestic
consumption, regardless of the decline in oil production.
Source: https://saudigazette.com.sa/
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