Saudi Arabia's real GDP grows 2.7% in Q1: GASTAT

02/05/2025 02:13 AST

Saudi Arabia's economy saw annual growth of 2.7 percent in the first quarter of 2025, driven by strong momentum in non-oil activities as the Kingdom continues efforts to diversify away from hydrocarbons.

According to flash estimates released by the General Authority for Statistics, non-oil activities expanded 4.2 percent during the first three months of the year, extending their growth streak to 17 consecutive quarters. Government services rose 3.2 percent, while oil-related activities contracted 1.4 percent.

Saudi Arabia's growth in the non-oil sector aligns with the goals outlined in the Vision 2030 program, which aims to diversify the country's economy by reducing reliance on crude revenues.

This comes as the International Monetary Fund, in its latest economic outlook, noted that short-term growth in the Middle East will be driven by the expansion of the non-oil sector, projecting the region's economy to grow by 2.6 percent in 2025 and 3.4 percent in 2026.

In a release, GASTAT stated it has conducted "a comprehensive revision of GDP estimates as part of its efforts to achieve high levels of alignment with international standards and data quality."

It added: "Nominal and real GDP (annually and quarterly) time series have been revised accordingly."

Commenting on the comprehensive revision of GDP estimates, Saudi Arabia's Minister of Economy and Planning and Chairman of GASTAT Faisal Al-Ibrahim said that it is a strategic step that reflects the Kingdom's commitment to improving the quality of its economic data, Saudi Press Agency reported.

He added that the revision will also enhance the transparency in measuring the performance of the national economy.

"This update comes within the framework of continuous efforts to develop statistical methodologies in line with international best practices, pointing out that the positive impact of this update will contribute to improving the accuracy of measuring the size of the Saudi economy and its components," said Al-Ibrahim.

The minister added that the revision is aimed at reflecting the contribution of additional economic activities within the Kingdom which include fintech, the creative economy, logistics, sports and entertainment.

Al-Ibrahim further said that the contribution of non-oil activities to the Kingdom's GDP has reached 53.2 percent, an increase of 5.7 percent over previous estimates.

On a quarterly basis, seasonally adjusted GDP rose 0.9 percent, with government activities jumping 4.9 percent and non-oil output increasing 1.0 percent. Oil sector GDP dropped 1.2 percent amid ongoing production cuts under the OPEC+ agreement.

Saudi Arabia's GDP growth also aligns with the broader Middle East trend, where other countries are steadily diversifying their economies.

Qatar's full-year GDP for 2024 grew by 1.7 percent, driven by a 1.9 percent rise in non-hydrocarbon activities. The UAE's central bank projects 4 percent GDP growth in 2024, while Bahrain reported year-on-year expansion of 2.1 percent in the third quarter.

Saudi Arabia is ramping up efforts to enhance its data infrastructure, drive digital transformation, and harness artificial intelligence and advanced technologies to boost the efficiency and accuracy of its statistical operations.

Speaking at the first Saudi Statistics Forum held earlier this week, Fahad Al-Dossari, president of GASTAT, reiterated the authority's commitment to supporting decision-makers by continuously developing the statistical system to meet national and international standards.

"Statistics are no longer merely supportive tools; today, they are at the heart of development work and a critical enabler of sustainable development, ensuring efficient spending, enhancing service quality, and supporting economic and social growth," Al-Dossari said during the event in Riyadh.

Arab News