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08-05-23

KSA's Real GDP Grows by 3.9 Percent YoY in Q1 2023, Non-Oil Sector

(MENAFN) According to data issued by the General Authority for Statistics, Saudi Arabia's real gross domestic product (GDP) grew by 3.9 percent year-on-year in the first quarter of 2023. This growth was driven by the non-oil sector, which saw activities increase by 5.8 percent between January and March, while government services grew by 4.9 percent, and the oil industry by 1.3 percent. These positive trends continued into April, with the Riyad Bank Saudi Arabia Purchasing Managers' Index report indicating that the Kingdom's PMI rose to 59.6 in April from 58.7 in March, albeit slightly lower than the eight-year peak in February.

However, the GASTAT report also showed a seasonally adjusted real GDP decrease of 1.3 percent in the first quarter of 2023 compared to the previous quarter. This was due to a decline in oil activities by 4.8 percent, while the non-oil sector and government services activities grew by 1.5 percent and 1.1 percent, respectively. Additionally, the real GDP in the first quarter slipped compared to the annual 5.4 percent growth recorded between October and December of 2022.

During the fourth quarter of last year, non-oil and oil activities picked up 6.2 percent and 6.1 percent, respectively. Government services activities inched up by 1.8 percent in the fourth quarter of last year compared to the same quarter in 2021. Overall, the Saudi Arabian economy advanced by 8.7 percent in 2022, fueled by a 15.4 percent surge in oil activities, compared to 3.2 percent in 2021.

The data suggests that while the Saudi Arabian economy is still largely reliant on the oil industry, the non-oil sector and government services are showing signs of growth and resilience. This is in line with the Kingdom's efforts to diversify its economy and reduce its dependence on oil revenues, as outlined in the Vision 2030 plan. Despite the slight drop in GDP in Q1 2023, the overall positive trend in the Saudi Arabian economy bodes well for its future growth and development.

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