Macroeconomic update - August 2024: (Robust growth in non-oil activity)

The 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.