Saudi economy expands 3.9% in Q2, driven by non-oil activity
According to flash estimates from the General Authority for Statistics, growth in non-oil activities reached 4.7 percent, outpacing the 3.8 percent expansion in the oil sector and a 0.6 percent rise in government services.
The non-oil sector contributed the largest share to GDP growth, adding 2.7 percentage points, followed by oil activities at 0.9 percentage points.
Government activities and net taxes on products each contributed 0.1 and 0.2 percentage points, respectively, to the overall expansion.
The data aligns with the macroeconomic outlook from S&P Global Ratings, which projects Saudi Arabia's real GDP to grow at an average rate of 3.5 percent between 2025 and 2028, surpassing the 0.8 percent growth recorded in 2024.
'Seasonally adjusted real GDP increased 2.1 percent in Q2/2025, compared to the previous quarter Q1/2025,' GASTAT said in its quarterly update.
#GASTAT publishes flash estimates of real GDP for Q2 of 2025.
— الهيئة العامة للإحصاء (@Stats_Saudi) July 31, 2025
'This increase was due to the largest increase in oil activities since Q3/2021, up by 5.6 percent this quarter. Non-oil activities grew by 1.6 percent while government activities recorded a decrease of 0.8 percent,' it added.
GASTAT said oil activities accounted for 1.3 percentage points of the quarterly growth, with non-oil sectors adding 0.9 percentage point.
However, government activities and net taxes on products each had a negative impact of 0.1 percentage point.
Supporting the non-oil growth trend, Saudi Arabia's non-oil exports, including re-exports, rose to SR31.11 billion ($8.29 billion) in May, marking a 6 percent increase compared to the same month in 2024, according to preliminary data from GASTAT released last week.
The UAE remained the top destination for the Kingdom's non-oil goods, with exports amounting to SR9.54 billion. India was the second largest partner at SR2.78 billion, followed by China at SR2.03 billion, Bahrain at SR989.1 million, and Turkiye at SR924.7 million.
Meanwhile, in its report titled 'Saudi Credit Trends: Change in Progress,' published on July 30, S&P Global said that Vision 2030 initiatives are 'set to enhance non-oil growth over the medium term,' supported by construction activity, rising consumer demand, and a broader labor force.
Female labor force participation has more than doubled since 1999, stabilizing at 36 percent since 2022.
S&P Global said that tourism now contributes approximately 6 percent of GDP and 14 percent of current account receipts in 2024, up from 5 percent in 2022.
The sector is expected to grow further due to improved visa processes and a broader leisure economy.
Despite projected fiscal deficits averaging 4.4 percent of GDP through 2028, public investments tied to Vision 2030, including major events like Expo 2030 and the 2034 FIFA World Cup, are expected to sustain economic momentum, S&P said.
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