Saudi Arabia’s Economy Shows Strong Growth in First Quarter of 2024
In a surprising turn of events, Saudi Arabia’s economy experienced a growth of 1.4 percent in the first quarter of 2024, outpacing the overall G20 countries, according to the latest data released by the Organisation for Economic Co-operation and Development.
Top Performers in the G20 Area
The GDP report for the G20 area revealed that China and India were the primary drivers of economic growth, with Turkiye, Korea, and Indonesia also showing higher GDP growth rates than the G20 average. Turkiye led the pack with a 2.4 percent increase, followed by India at 1.9 percent, China at 1.6 percent, Korea at 1.3 percent, and Indonesia at 1.2 percent.
Varying Economic Conditions Across G20 Countries
While Saudi Arabia saw a significant recovery, other G20 countries faced different economic conditions. The US experienced a slowdown, Japan’s economy contracted, and South Africa saw a minor decline. However, countries like Brazil, the UK, and Germany showed signs of recovery in the first quarter of 2024.
Focus on Non-Oil Activities
The General Authority for Statistics reported that Saudi Arabia’s non-oil activities rose by 0.9 percent in the first quarter of 2024, with a 3.4 percent year-on-year increase. Strengthening the non-oil private sector is crucial for the Kingdom as it diversifies its economy away from oil dependency.
Government and Non-Government Sectors Drive Growth
Gross fixed capital formation (GFCF) surged to SR317.5 billion in the first quarter of 2024, with the government and non-government sectors both contributing to the growth. This capital accumulation plays a crucial role in supporting future production capabilities and economic growth.
Foreign Direct Investment Boosts Economic Trajectory
Saudi Arabia’s proactive efforts to attract foreign direct investment have strengthened the Kingdom’s economic trajectory. Initiatives like the National Investment Strategy and zero-income tax incentives for foreign entities are driving growth and diversification in line with Vision 2030.
International Firms Set Up Shop in Saudi Arabia
The Ministry of Investment issued 3,157 investment licenses during the quarter, with the construction and manufacturing sector leading the way. The real estate sector saw a significant increase in investment licenses, and 127 international firms relocated their regional headquarters to Saudi Arabia, including major players like Google, Microsoft, and Amazon.