Despite decline in oil production, diverse industries foster growth in the kingdom
Saudi Arabia’s non-oil activity saw a significant growth of 4.4 percent in 2023 compared to 2022, official data from the General Authority for Statistics showed. In 2023, various non-oil activities experienced robust expansion, showcasing the effectiveness of the Kingdom’s economic diversification efforts.
Growing economic activity
In addition to non-oil activity, government activities in Saudi Arabia saw a notable rise of 2.1 percent in 2023, reflecting the ongoing commitment to bolster public sector initiatives and services. Moreover, the report revealed that most economic activities in the country witnessed positive growth last year. Social and personal services activities recorded the highest annual growth rate of 10.8 percent. Meanwhile, transportation, storage, and communications activities also saw a 7.3 percent percent increase.
Notably, wholesale and retail trade, restaurants, and hotel activities increased by 7 percent in 2023 compared to 2022. Meanwhile, the financial, insurance, and business services sector saw a 6.8 percent increase in 2023.
Oil activity
Although Saudi Arabia saw a significant increase in non-oil activity, its gross domestic product (GDP) decreased by 0.8 percent in 2023. This decline is attributed to a decline in oil activities. Saudi Arabia’s decision to reduce its crude output aligns with the Organization of the Petroleum Exporting Countries and its allies (OPEC+). Oil activity in Saudi Arabia saw a 9 percent decline in 2023, compared to 2022.
To sustain market stability, Saudi Arabia implemented significant oil output cuts throughout 2023. Initially reducing output by 500,000 barrels per day in April, it extended the measure until December 2024. Moreover, Saudi Arabia implemented an additional 1-million-barrels-per-day cut in July, further contributing to the decline in oil activities.
Despite its growing non-oil activity, crude petroleum and natural gas activities remained the largest contributors to Saudi Arabia’s GDP, constituting 25.4 percent. Moreover, government services made a substantial contribution, accounting for 15.7 percent of the GDP.
Read: Dubai GDP 2023: Growth in first nine months underscores strong fundamentals
Saudi Arabia’s GDP
Despite overall economic growth, particularly in non-oil activity, Saudi Arabia’s GDP declined by 4.3 percent in the fourth quarter of 2023 compared to the same period in 2022. Additionally, the Kingdom witnessed a decline of 0.6 percent in GDP compared to the third quarter of 2022. Per capita GDP also experienced an 8.5 percent decline, amounting to SAR118,216 in 2023.
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