Saudi Arabia: GDP growth remains strong in Q3

A flash estimate showed that the economy grew 8.6% on an annual basis in Q3, thereby confirming the economy continued to grow at one of fastest rates in the region after having expanded 12.2% in Q2.

The oil sector grew 14.5% in Q3 compared to 22.9% in Q2. Growth in the non-oil private sector declined to 5.6% in Q3 from 8.2% in Q2, while government services growth was stable at 2.4%.

Q3’s slight deceleration was in part due to a base effect—seasonally adjusted quarter-on-quarter growth rose to 2.6% in Q3 from 2.2% in Q2. The oil sector drove the improvement. Government services activity also improved, while non-oil private sector came close to stagnation. Looking ahead to Q4, our panelists expect year-on-year growth to weaken on a tougher base effect and the hit to oil production arising from the recent OPEC+ quota cut.

FocusEconomics panelists see GDP growing 3.6% in 2023, which is down 0.3 percentage points from last month’s forecast. In 2024, the panel sees economic growth at 2.9%.