Saudi Arabia’s economy saw growth in the first quarter, driven mainly by stronger non-oil sector performance as the country continues its push to diversify beyond hydrocarbons. According to preliminary government data, real GDP rose by 2.7% compared to the same period last year.
The national statistics authority recently updated its data methods, revising GDP calculations to give more weight to non-oil activities in line with global standards. Non-oil sectors expanded by 4.2%, and government activities grew by 3.2%. However, oil-related activities dipped by 1.4%.
Officials highlighted strong demand for more detailed economic data, with local needs shaping the new reporting approach. Analysts noted that private sector momentum reflects ongoing investment efforts, while recent government activity benefited from earlier oil prices. However, government spending may slow in the coming months as oil prices decline.
Saudi Arabia’s Vision 2030 initiative requires significant investment to reduce reliance on oil by fostering private sector and non-oil growth. Forecasts suggest oil prices will drop further next year, potentially impacting public finances. The IMF recently lowered its 2025 growth outlook for Saudi Arabia, and government sources indicate the kingdom is prepared for a period of lower oil prices without additional supply cuts.