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Saudi Arabia’s real GDP grew 2.8% y-o-y in 3Q 2024, confirming flash estimates that came out in November, according to the latest revised estimates (pdf) by the General Authority of Statistics (Gastat).
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Breaking a year-long downward slide: The GDP growth breaks a four-quarter long downward trend, which saw GDP shrink 0.3% y-o-y in 2Q 2024. It comes on the back of a 4.3% y-o-y increase in non-oil activities, 3.1% y-o-y growth in government activity, and a moderate 0.05% y-o-y 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 was up 0.9% q-o-q in 3Q, driven by a 1.2% increase in oil activities and a 0.7% increase in non-oil activities during the period. Meanwhile, quarterly growth was partly offset by a 0.3% decline in government activity.
The non-oil sector in the driver’s seat: The Kingdom looks set to continue banking on the non-oil sector for GDP growth in the near future, with Opec+ pushing back production increases last week by a further three months to April 2025 as oil prices continue to fall. The Finance Ministry did not cite the oil sector as a key driver for the economy in its FY 2025 budget statement due to unclear timelines for Opec+ production restarts.
Forecasts for economic growth have trended down all year, with the Finance Ministry recently downgrading its 2024 growth forecast to 0.8% down from its initial forecast of 4.4%. The World Bank also slashed its estimate to 2.5% in April — and again to 1.1% in December — 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.
Looking ahead: The Finance Ministry is targeting GDP growth of 4.6% for FY 2025 on the back of non-oil activities and private sector participation.
