Macroeconomic update - August 2024: (Robust growth in non-oil activity)
Macroeconomic ReportThe Saudi domestic economy continues to grow robustly. Flash estimates show real non-oil GDP expanded by 4.4 percent in Q2 2024, up from 3.4 percent in Q1. Domestic Trade, Construction, and Transport continued to support growth. Available data for Q2 indicate that activity in these sectors continues robustly. Official sectorial GDP data, which are only available through Q1, indicate a modest year-on-year growth in "Non-oil manufacturing", up by 0.7 percent, mainly due to a slowdown in petrochemical growth. Meanwhile, domestic manufacturing demand is strong and new factories continue to be rolled out. Thus, we forecast real non-oil GDP growth at 4.5 percent in 2024, higher than last year’s growth of 4.4 percent, as we expect a further acceleration in activity in H2, especially in Q4.
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Saudi Economy in 2024-25
Macroeconomic ReportSaudi Arabia’s non-oil economy continues to expand at a brisk pace. The authorities’ preliminary estimate puts non-oil GDP growth at 4.6 percent in 2023 and we see an acceleration to 5 percent-plus in the next two years. Growth will be driven by both consumption and investment, with net exports a drag—at least this year. Consumer price inflation should remain contained, though project cost overruns are likely.
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Macroeconomic update - December 2023: (Domestic demand remains strong)
Macroeconomic ReportDomestic demand in the Kingdom remains very strong, driven by a booming projects market and firm consumption growth. Following a comparatively soft patch in Q3, the non-oil economy is picking up pace again, thanks in part to an acceleration in central government spending. We expect non-oil GDP growth to reach 5.1 percent this year and 5.2 percent in 2024.
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Q2 2023 GDP Update: (Non-oil GDP growth accelerates in Q2-23)
Macroeconomic Report‘Non-oil Activities’ real GDP growth accelerated to 6.1 percent, year-on-year, in Q2-23, pushing up the average for the past four quarters to 5.9 percent. Meanwhile, ‘Government Activities’, which is separate, eased back to 2.3 percent growth following a spike in Q1-23. Overall GDP growth was weighed down by cuts to oil production, and fell to 1.2 percent from 3.8 percent in Q1.
![report image](/sites/default/files/2023-09/report-macroeconomic_en.jpg)
Macroeconomic update - July 2023: (Raising our non-oil GDP forecast)
Macroeconomic ReportThe Saudi domestic economy continues to grow robustly. Real non-oil GDP expanded by 5.4 percent in Q1-23, with Domestic Trade, Construction, and Transport leading the way. Available data for Q2 indicate that activity in these sectors continues at a brisk pace. Manufacturing was the only sector to record a year-on-year decline, with Refining contracting in the face of soft regional demand, and Petrochemicals exports to China struggling to gain traction. Nevertheless, Saudi domestic Manufacturing demand is strong and new factories continue to be rolled out. Thus, we raise our non-oil GDP growth forecast to 5.9 percent this year, with a similar rate of expansion anticipated for 2024.
![report image](/sites/default/files/2023-07/report-macroeconomic_en.jpg)