S&P: We expect Saudi GDP growth to accelerate from 1.2% in 2024 to 2.8% in 2025

Standard & Poor’s Market Intelligence maintained its expectations that Saudi Arabia’s real GDP will grow by 1.2% in 2024 and accelerate to 2.8% in 2025, supported by increased oil production in the second half of this year, while non-oil activity growth is expected to lose momentum. Standard & Poor’s said that the strong performance of the Saudi economy confirms its expectations that the growth of the non-oil sector will drive the economy forward during the current year, but some slowdown is expected in the second half of the year, especially since the government is currently restructuring many of the timetables for projects related to Saudi Vision 2030.

According to the Arab World News Agency, the research institution affiliated with Standard & Poor’s Global expected some slowdown in the growth of non-oil activities in the Kingdom in the second half of this year, with a reduction in public investment spending and weak private sector investments due to high interest rates.

It added that public investment spending will be reduced as a result of strengthening the conservative Saudi fiscal strategy, and high interest rates will limit private sector investments until the US Federal Reserve (Central Bank) takes the first step and reduces interest rates, which it expects to be next December.

Standard & Poor’s Market Intelligence indicated that the main purchasing managers’ index for the Saudi non-oil economy declined in May and June, but it is still safely in the growth zone at 55 points.

She expected the index to remain relatively close to this level in the third quarter, with non-oil economic growth remaining strong, noting that consumer spending is benefiting from a decline in consumer goods prices and strong increases in real income.