Saudi Economy Grows 3.9% in Q2 Thanks to Non-Oil Sector
Saudi Arabia’s economy grew by 3.9% in the second quarter of 2025 compared to the same period last year, mainly because of strong performance in non-oil industries, according to official data released on Thursday.
Growth across different sectors
All key areas of the economy showed growth. Non-oil activities grew by 4.7%, oil-related activities rose by 3.8%, and government services increased by 0.6%, based on data from the General Authority for Statistics (GASTAT).
The non-oil sector was the main driver of growth, contributing 2.7 percentage points to the overall GDP increase. Oil-related activities added 0.9 points, and the rest came from government services and taxes.
Compared to the first quarter of 2025, the economy grew by 2.1%. Oil output increased by 5.6%, non-oil activities grew by 1.6%, but government services went down by 0.8%. This was the strongest oil growth seen since late 2021.
These results highlight the progress of Saudi Arabia’s Vision 2030 plan, which aims to reduce the country’s dependence on oil.
Non-oil sector keeps growing
Sectors like retail, tourism, transport, logistics, and business services continued to grow, supported by government spending and big national projects. Global institutions have taken notice. The International Monetary Fund (IMF) raised its 2025 growth forecast for Saudi Arabia to 3.5%, and S&P upgraded the country’s credit rating to ‘A+’ because of strong non-oil performance.
Positive business activity
The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), which measures business activity, rose to 57.2 in June—its highest level in three months. Any number above 50 shows growth.
New orders increased at the fastest rate in four months, with local sales leading the way, thanks to better marketing and new customers. However, export growth stayed low.
Published: 1st August 2025
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