Saudi Arabia’s non-oil activities increased by 3.5 percent in the third quarter of 2023, compared to the same period of the previous year, as the Kingdom steadily diversifies its economy away from oil, according to official data released by the General Authority for Statistics.
The report also revealed a 0.4 percent rise in non-oil activities in the third quarter compared to the previous quarter of this year. Strengthening the non-oil private sector is crucial for Saudi Arabia as it aligns with the goals outlined in Vision 2030, which aims to diversify the economy.
However, the report highlighted a decline in Saudi Arabia’s real gross domestic product (GDP) by 4.4 percent year-on-year in the third quarter, and by 3.2 percent compared to the previous quarter. This decline can be attributed to a 17 percent decrease in oil activities during the third quarter, following the Kingdom’s decision to reduce oil output in alignment with the Organization of the Petroleum Exporting Countries (OPEC).
The commitment to a 500,000 barrels per day output cut, which began in April and was extended until December 2024, contributed to this reduction. Additionally, Saudi Arabia pledged an extra 1 million barrels per day cut in July, with the Ministry of Energy announcing in November that this supplementary cut would continue until the end of December 2023.
The report from GASTAT also indicated that government activities, the second-highest contributor to real GDP at 15.3 percent, grew by 1.9 percent in the third quarter compared to the same period last year. However, government activities experienced a 3.8 percent decline in the third quarter compared to the second quarter of this year.
Furthermore, the report noted positive growth rates in most economic activities during the third quarter. Community, social, and personal services activities grew by 11.8 percent year-on-year, while finance, insurance, and business services increased by 6.2 percent. Wholesale and retail trade, restaurants, and hotel activities also rose by 5.4 percent during the same period.