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The Kingdom’s real GDP grew 2.8% y-o-y 3Q 2024, breaking a four-quarter downward trend, according to flash estimates (pdf) by the General Authority of Statistics (Gastat). Final figures are slated for release on Sunday, 8 December, as per Gastat’s website. The story got ink from Reuters and Bloomberg.
Driving the growth: The rebound came on the back of a 4.2% y-o-y increase in non-oil activities, a 3.1% increase in government activity, and a 0.3% uptick in oil activities. Oil activity accounts for c. 40% of GDP and about 75% of government revenues.
On a quarterly basis: Seasonally adjusted real GDP grew 0.8% q-o-q, driven by a 1.3% increase in oil activities and a 0.5% increase in non-oil activities during the period. The quarterly growth was partly offset by a 0.3% decline in government activity.
The recovery in Saudi’s real GDP growth is attributed to growth in the non-oil sector, while oil cuts’ effects taper off, Bloomberg said. Opec+ had initially planned to begin phasing out supply cuts by December, but weak markets may see that date pushed forward. Meanwhile, a lack of discipline with production caps in the global cartel could push Saudi Arabia and other Opec+ members to abandon oil cuts altogether
Forecasts for economic growth in Saudi have trended down all year, with the Finance Ministry recently downgrading its yearly forecast to a 0.8% growth clip after government officials initially penciled in 4.5-5.0% growth for the year in January. The World Bank also slashed its estimate to 2.5% in April — which it maintained in June — after citing a 4.1% figure earlier in the year. Meanwhile, the IMF cut back an earlier 4% estimate to 2.7% in January, before slashing it again to 2.6% in April, and finally to 1.7% in July.
Saudi’s Vision 2030 is full steam ahead despite regional turbulence: Challenges in the geopolitical landscape are pushing the Kingdom to push “more steadfastly” with diversification plans, Economy Minister Faisal Al Ibrahim told CNBC on the sidelines of FII (watch, runtime: 0:40).
