Saudi Arabia’s economy expanded at the fastest pace since early 2023 in the third quarter, driven by a rebound in oil production and strong state investment in non-oil industries.
Bloomberg states that the latest data show that the kingdom’s growth momentum is returning just as its Vision 2030 projects demand higher fiscal spending and investor engagement.
According to preliminary figures from the General Authority for Statistics, gross domestic product (GDP) rose 5% year-on-year in the July–September period, up from 3.9% growth in the previous quarter.
The acceleration reflects gains across both oil and non-oil segments, which together form the foundation of Saudi Arabia’s diversification strategy.
Oil output recovery boosts economic momentum
Saudi Aramco, the state oil company, has increased crude production in recent months following supply adjustments agreed by OPEC+, the producer group co-led by the kingdom and Russia.
Between July and September, oil output averaged 9.7 million barrels per day compared to 9.3 million barrels in the second quarter, according to Bloomberg data.
The rise in output lifted oil GDP by 8.2% year-on-year, marking a turnaround after several quarters of slower expansion due to production cuts and weaker global demand.
Oil continues to make up almost half of Saudi Arabia’s total economic output, reinforcing its critical role even as the country invests heavily in renewable energy, manufacturing, and technology.
Non-oil growth steady amid diversification efforts
Non-oil activities, which are central to Crown Prince Mohammed bin Salman’s Vision 2030 plan, expanded by 4.5% during the third quarter.
The pace was consistent with the previous quarter, suggesting that government-led investments in sectors such as logistics, tourism, and construction are maintaining steady momentum.
The non-oil expansion underscores Saudi Arabia’s ongoing transformation into a more diversified $1.2 trillion economy.
The focus on long-term projects, including NEOM and the Red Sea developments, is intended to attract foreign direct investment and create employment opportunities beyond the hydrocarbons industry.
Future Investment Initiative signals investor interest
The GDP data coincided with the Future Investment Initiative (FII), the crown prince’s flagship investment conference, which draws global policymakers and business leaders each year.
The 2024 edition of the forum featured discussions on artificial intelligence, advanced manufacturing, and sustainable development—sectors that are increasingly integral to Saudi Arabia’s diversification plans.
Among the notable participants were Goldman Sachs Group Inc. Chief Executive Officer David Solomon and executives from major technology firms.
Their presence highlighted growing international interest in the kingdom’s economic transition, even as investors weigh the challenges of regulatory frameworks and fiscal policy adjustments.
Rising spending pressures add fiscal challenges
While state-backed investment has supported growth, it has also increased fiscal pressures. The government’s heavy spending on Vision 2030 projects has pushed the budget into deficit, prompting authorities to tap global bond markets more frequently.
The kingdom’s borrowing has risen sharply in recent years as it balances ambitious infrastructure spending with global oil market fluctuations.
The latest GDP performance, therefore, reflects a careful trade-off—sustaining growth through investment while managing fiscal risk and maintaining credibility among international investors.
The combination of higher oil output and consistent non-oil expansion suggests that Saudi Arabia is regaining momentum after a period of slower growth.
However, the broader challenge remains ensuring that non-oil revenues eventually offset the volatility of global energy prices—a key goal for Vision 2030 as the decade progresses.
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