Saudi Arabia’s economy grew by 2.8% year-on-year in the third quarter of 2024, in line with preliminary estimates, according to the General Authority for Statistics (GASTAT). This marks continued economic resilience, with significant contributions from the non-oil sector driving the expansion.
Non-Oil Sector Leads Growth
The non-oil sector surged 4.3% year-on-year, highlighting the Kingdom’s efforts to diversify its economy under Vision 2030. On a quarterly basis, non-oil activities posted a 0.7% increase compared to Q2 2024.
Key contributors to non-oil growth included:
- Wholesale and Retail Trade, Restaurants, and Hotels: Up 5.8% year-on-year and 1.9% quarter-on-quarter, reflecting robust consumer demand.
- Financial, Insurance, and Business Services: Grew 5.7% year-on-year and 2% quarter-on-quarter, driven by innovation and expansion in financial services.
- Construction and Building: Achieved 4.6% year-on-year growth and 0.9% on a quarterly basis, underscoring infrastructure development projects across the country.
Government and Oil Sector Contributions
Government activities posted a 3.1% annual increase but declined 0.3% quarter-on-quarter. The oil sector recorded marginal year-on-year growth of 0.05% but improved 1.2% on a quarterly basis, reflecting steady production amid global market fluctuations.
Consumer Spending and Investments
Consumer and investment spending showed mixed performance during the quarter:
- Final Consumer Spending: Increased by 6.2% year-on-year but dropped 1.8% quarter-on-quarter.
- Private Final Consumer Spending: Grew 3.9% year-on-year and 2.8% quarter-on-quarter, signaling healthy household consumption.
- Fixed Capital Formation: Rose by 4.5% year-on-year and 0.9% quarter-on-quarter, highlighting continued investment in key projects and sectors.
Outlook and Implications
Saudi Arabia’s economic performance in Q3 reflects the ongoing success of its diversification strategy. The robust growth in non-oil sectors aligns with the objectives of Vision 2030, which aims to reduce reliance on oil revenues and foster sustainable economic development.
While oil activities showed minimal annual growth, the quarter-on-quarter uptick signals potential stabilization in global energy markets. Additionally, rising consumer and business spending reinforces confidence in the Kingdom’s economic trajectory.
