Saudi GDP expected to grow by 0.8% in 2024

The Ministry of Finance revealed in its preliminary statement for the Kingdom’s 2025 budget a short while ago that the real GDP is expected to grow by 0.8% in 2024, supported by the growth of non-oil activities, which are expected to grow by about 3.7%. This is reinforced by the positive economic indicators witnessed in the first half of this year, especially those related to consumption and private investment. Positive growth rates are expected to continue in the medium term due to the Kingdom’s commitment to implementing its strategy.

According to the preliminary statement, the positive performance witnessed by the local economy through non-oil activities was reflected in the labor market indicators, through the growth recorded by 4.1% in the number of Saudi workers in the private sector by the end of the second quarter of 2024 and about 92 thousand workers compared to the same period last year.

The statement indicated preliminary expectations that the consumer price index (inflation rate) for the year 2024 will reach about 1.7%, and expectations indicate that inflation rates will continue to remain at acceptable levels in the medium term, thanks to the proactive measures and policies taken by the government to contain rising prices. While preliminary estimates for the year 2025 indicated a growth in real GDP of 4.6%, supported by the growth of the GDP of non-oil activities. According to the statement, the expected remarkable recovery in the Kingdom’s economy is expected to lead to positive developments in revenues in the medium term. Total revenues for the year 2025 are estimated to reach about 1,184 billion riyals, reaching about 1,289 billion riyals in 2027. It is noteworthy that the International Monetary Fund praised the unprecedented economic transformation in the Kingdom, including reforms in public finance and the regulatory environment for business, following Article IV consultations with the Kingdom. The Fund’s experts indicated that economic activity in the Kingdom remains strong despite the decline in oil GDP growth, and they confirmed that the impact of geopolitical tensions in the Middle East region on the Kingdom is limited, thanks to the limited exposure of commercial and financial activities to the regions affected by these tensions and the continuity and uninterruptedness of shipping operations. The Fund’s experts’ expectations also indicated that non-oil GDP will grow by about 3.5% in 2024, and GDP will grow by about 4.5% in 2025. The experts’ expectations also indicated that total GDP growth will stabilize at 3.5% annually in the medium term.