Saudi Arabia’s GDP grows 8.8% in Q3 driven by rise in oil activities

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Saudi Arabia’s real gross domestic product grew by 8.8 per cent in the third quarter of 2022 compared to the same period last year driven by an increase in oil activities, according to a report released by the General Authority for Statistics.

GASTAT noted that the real GDP growth in the third quarter was up 2.1 per cent compared to the second quarter of this year.

According to the report, carried by local media, oil activities in the third quarter increased 14.2 per cent year-on-year, and 4.5 per cent quarter-on-quarter.

The report further pointed out that non-oil activities in the Kingdom also grew 6 per cent year-on-year, while it decreased by 0.5 per cent quarter-on-quarter.

Government activities also rose by 2.5 per cent in the third quarter compared to the same period a year ago.

The GASTAT report further noted that crude petroleum and natural gas grew by 14.8 per cent year-on-year, thus contributing 35.2 per cent to the national GDP.

“The non-oil economic activities outside the government contributed with a share of 50.7 per cent to GDP, with the manufacturing (excluding petroleum refining) with a share of 7.8 per cent being the most important sub-category within the non-oil economy,” the report said.

According to GASTATl last month flash estimates the real Gross Domestic Product (GDP) of Saudi Arabia continued to grow by 8.6% in Q3 2022 compared to Q3 2021.

This growth is mainly due to the increase in oil activities by 14.5% in Q3 2022. Non-oil activities grew by 5.6% and government services activities by 2.4% (year-on-year) in the reference period, reported Saudi Press Agency (SPA).

The seasonally adjusted real GDP increased by 2.6% in Q3 2022 compared to the previous quarter, Q2 2022. Oil activities grew by 5.8%, government services activities by 1.1%, and non-oil activities by 0.2% (Quarter-on-Quarter).

The General Authority for Statistics is the only official statistical reference for statistical data and information in Saudi Arabia. It executes all the statistical work, in addition to the technical oversight of the statistical sector. It also designs and implements field surveys, conducts statistical studies and researches, and analyses data and information, in addition to documenting and archiving works of information and statistical data that cover all aspects of life in Saudi Arabia from its multiple sources.

Saudi Arabia’s Crown Prince said last Wednesday that the 2023 budget surplus, forecast at 16 billion riyals, would be directed towards boosting government reserves, supporting state funds and strengthening the kingdom’s financial position.

Prince Mohammed Bin Salman, in remarks on state news agency SPA, stressed the leading role of the world’s top oil exporter in stabilising energy markets as part of efforts to strengthen the stability of both the local and global economies and their growth.

Saudi Arabia said on last Wednesday it recorded its first annual budget surplus in nearly a decade, beating its own projections in a year of elevated oil prices.

The surplus for 2022 amounted to 102 billion Saudi riyals ($27 billion), representing 2.6 per cent of GDP, according to preliminary estimates, the finance ministry said.

That compared to a surplus of 90 billion Saudi riyals that had been projected for 2022 at the end of last year.

The world’s biggest crude exporter also preliminarily recorded GDP growth of 8.5 per cent for the year, the finance ministry said, higher than the 7.6 per cent predicted by the International Monetary Fund.

The budget approved for 2023 foresees a surplus of 16 billion Saudi riyals ($4 billion) and GDP growth of 3.1 per cent, the ministry said.

The strong data comes as much of the world grapples with widespread energy shocks and deepening worries about recession.

In a briefing with journalists in Riyadh on Wednesday, Saudi Finance Minister Mohammed Al-Jadaan pushed back on the notion that the surplus resulted from the Ukraine war.

Instead, he said it reflected investments the kingdom had made in its oil and gas sector as well as growth in non-oil sectors, as officials push the Vision 2030 agenda of economic diversification.

“We invested a lot of money when people did not,” he said.

“We are not celebrating the surplus. For us it’s not really big news. It’s something that we expected. We’ve been working… to curtail our spending, to increase our non-oil revenues.”

Last month, Mohammed Bin Salman announced  plans to transform Riyadh airport into a massive aviation hub with six parallel runways and designed to accommodate up to 120 million travellers by 2030, state news agency SPA reported.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), will build King Salman International Airport, which should stretch over 57 square kilometres (22.01 square miles) and include current King Khaled airport, SPA said.

The Saudi Arabia has set itself high targets for diversifying its economy and reducing its dependence on oil, pouring hundreds of billions of dollars into a plan called Vision 2030 initiated by Prince Mohammed.

Agencies

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