How the Non-Oil Sector Drove Saudi Arabia's 1.2% Q2 GDP Growth

How the Non-Oil Sector Drove Saudi Arabia's 1.2% Q2 GDP Growth

By Staff Writer, 13 September 2023

According to government data released on Thursday (7/9), Saudi Arabia's economy expanded by 1.2% in the second quarter compared to the previous year.

Notably, non-oil sectors demonstrated significant growth, which stood in stark contrast to the overall growth rate that slowed down significantly from the previous year due to reduced activities in the oil sector.

Data from the General Authority for Statistics (GASTAT) indicated a 4.3% decline in the oil sector's activities during the second quarter compared to the same period the previous year.

In contrast, non-oil sectors experienced a robust 6.1% surge, primarily propelled by domestic demand.

Previous official estimates had projected a GDP growth rate of 1.1% for the second quarter.

It's worth noting that Saudi Arabia achieved an 8.7% economic growth rate last year, leading to its first budget surplus in nearly a decade.

However, this year's production cuts and lower oil prices have negatively impacted oil revenues and are expected to exert downward pressure on overall economic growth.

On September 7, the International Monetary Fund (IMF) observed that Saudi Arabia's fiscal outlook is robust in the short term, with a generally balanced risk profile.

In an official statement, the IMF highlighted that Saudi Arabia, among G20 nations, achieved the highest economic growth rate at 8.7%.

The financial institution also emphasized that the Kingdom possesses ample precautionary reserves, and the pegging of its currency to the US dollar continues to benefit its economy.

Source: Zawya & Arab News

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