Saudi Arabia’s economy grew by 1.3% in 2024, with the fourth quarter showing the strongest growth in two years
Saudi Arabia’s economy grew by 1.3% in 2024 compared to the previous year, driven by a rise in the non-oil sector, according to early official data.
Saudi Arabia’s GDP growth
Saudi Arabia’s economy in 2024 grew mainly because of a 4.3% increase in non-oil activities and a 2.6% rise in government activities, according to the General Authority for Statistics (GASTAT). However, the oil sector shrank by 4.5%.
This mixed performance shows the challenges Saudi Arabia faces as it tries to move from an oil-dependent economy to one that is more diverse.
In the last quarter of 2024, Saudi Arabia’s real GDP grew by 4.4% compared to the same period last year, the highest growth in two years. This was mainly due to growth in all key sectors, with non-oil activities growing by 4.6%, and the oil sector increasing by 3.4%. Government activities also grew by 2.2%.
Compared to the previous quarter, GDP grew by 0.3%, driven by a 1.3% rise in non-oil activities and a 0.6% increase in government activities. However, the oil sector saw a 1.5% drop.
In December, Saudi Arabia’s non-oil private sector kept growing, supported by strong domestic demand and higher exports. Although growth slowed slightly, the Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) stayed above 50.0, indicating continued growth and good business conditions.
2025 outlook
Looking ahead to 2025, Saudi Arabia has lowered its GDP growth forecast to 4.6% from 5.7%, and for 2026, it lowered the forecast to 3.5% from 5.1%.
In November, Crown Prince Mohammed bin Salman approved a 2025 budget with a planned deficit of $26.9 billion (SAR 101 billion). The budget predicts general expenses of $342 billion (SAR 1.3 trillion), which is more than the expected revenue of $315.1 billion (SAR 1.2 trillion), leading to a 2.3% deficit of GDP.
In December, Fitch Ratings confirmed Saudi Aramco’s A+ long-term rating with a stable outlook.
Inflation in Saudi Arabia was between 1.5% and 2% for most of 2024, mainly due to rising housing rents. The IMF expects inflation to stay around 2% in the future.
Big number
In a big move, Crown Prince Mohammed bin Salman has said Saudi Arabia plans to increase investments and trade with the US to $600 billion in the next four years.
Published: 30th January 2025
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