Saudi Arabia’s non-oil revenues reached 50% of the Kingdom’s total GDP in 2023, the highest share ever recorded, according to figures released by the Ministry of Economy and Planning on 14 March, which demonstrate the success of the Kingdom’s ongoing drive for economic diversification.
The Kingdom’s non-oil economy is now valued at SR1.7 trillion (c. USD453 billion) at constant prices, driven by steady growth in exports, investment and consumer spending. Private-sector investments expanded by 57% in 2023, reaching a record high of SR959 billion.
Arts and entertainment, which saw exceptional growth of 106% between 2021 and 2022, were at the forefront of economic diversification efforts, while the food sector grew by 77%, transport and storage by 29%, health and education by 10.8%, trade, restaurants and hotels by 7%, and communications by 3.7%.
Economic diversification is succeeding across the whole Gulf Cooperation Council (GCC) region, according to last year’s World Bank Gulf Economic Update (GEU), which said: “The region has shown notable improvements in the performance of the non-oil sectors despite the downturn in oil production during most of 2023. Diversification and the development of non-oil sectors has a positive impact on the creation of employment opportunities across sectors and geographic regions within the GCC.”
The World Bank estimates that the GCC saw its GDP grow by 1% in 2023 with the weaker performance driven primarily by lower oil sector activities reflecting successive oil production cuts and the global economic slowdown. But the region is expected to see economic activity pick up and is expected to grow at 3.6% and 3.7% in 2024 and 2025, respectively.
The World Bank said the reduction in the GCC’s oil sector activities would be offset by non-oil sector growth of 3.9% in 2023 and 3.4% in the medium term, driven by fiscal policies, strategic fixed investments and sustained private consumption.
