Saudi Arabia’s Economy Shows Resilience in the Second Quarter of 2024
Official data released by the General Authority for Statistics has revealed that Saudi Arabia’s seasonally adjusted real gross domestic product (GDP) experienced a growth of 1.4 percent in the second quarter of 2024. This growth was primarily driven by non-oil activities, showcasing the Kingdom’s efforts towards economic diversification.
Oil vs. Non-Oil Activities
During the period from April to June, oil activities in Saudi Arabia grew by 1.3 percent quarter-on-quarter, while non-oil operations expanded by 1.4 percent. Government activities also saw a significant increase of 3.2 percent in the second quarter of this year compared to the previous three months.
Economic Diversification for Sustainable Growth
The focus on strengthening the non-oil sector is crucial for Saudi Arabia’s economic diversification journey. By reducing its dependence on crude revenues, the Kingdom aims to build a more resilient economy that can withstand global oil market fluctuations and ensure sustainable growth for the future.
Challenges and Opportunities
Despite the overall growth, the report highlighted a 0.4 percent contraction in the Kingdom’s GDP in the second quarter compared to the same period last year, mainly due to an 8.5 percent decline in oil activities. However, non-oil activities showed a promising 4.4 percent expansion year-on-year.
Market Stability and Government Initiatives
The decline in oil activities was a result of Saudi Arabia’s decision to reduce crude output in alignment with the OPEC+ agreement. To maintain market stability, the Kingdom extended its oil output cut until December 2024. Government activities also saw a positive growth of 3.6 percent in the second quarter compared to the same period in 2023.
Future Projections and Resilience
The International Monetary Fund predicts that Saudi Arabia’s GDP will continue to grow, with expectations of a 1.7 percent growth in 2024 and a significant 4.7 percent growth in 2025. These projections reflect the Kingdom’s resilience and commitment to economic diversification for long-term sustainability.