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Saudi Arabia’s economy expanded by 3.9 per cent year on year in the second quarter of 2025, led by a strong performance in non-oil sectors, official data showed, reports Arab News.
According to flash estimates from the General Authority for Statistics (GASTAT), growth in non-oil activities reached 4.7pc, outpacing the 3.8pc expansion in the oil sector and a 0.6pc 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 3.5pc between 2025 and 2028, surpassing the 0.8pc growth recorded in 2024.
“Seasonally adjusted real GDP increased 2.1pc in Q2/2025, compared to the previous quarter Q1/2025,” GASTAT said in its quarterly update.
“This increase was due to the largest increase in oil activities since Q3/2021, up by 5.6pc this quarter. Non-oil activities grew by 1.6pc while government activities recorded a decrease of 0.8pc,” it added.
GASTAT said oil activities accounted for 1.3pcage points of the quarterly growth, with non-oil sectors adding 0.9pcage point.
However, government activities and net taxes on products each had a negative impact of 0.1pcage point.
Supporting the non-oil growth trend, Saudi Arabia’s non-oil exports, including re-exports, rose to 31.11 billion riyals ($8.29bn) in May, marking a 6pc 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 9.54bn riyals. India was the second largest partner at 2.78bn riyals, followed by China at 2.03bn riyals.
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 labour force.
Female labour force participation has more than doubled since 1999, stabilising at 36pc since 2022.
S&P Global said that tourism now contributes approximately 6pc of GDP and 14pc of current account receipts in 2024, up from 5pc in 2022.
The sector is expected to grow further due to improved visa processes and a broader leisure economy.
Despite projected fiscal deficits averaging 4.4pc 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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