Saudi Arabia's economy grows at fastest quarterly pace since 2022

Saudi Arabia’s economy grew in the fourth quarter at the quickest pace since 2022 as the non-oil sector expands under the kingdom’s multi-billion dollar strategy to diversify the economy.

The country’s gross domestic rose 4.4 per cent year-on-year, preliminary data from the country’s General Authority for Statistics. It grew 2.8 per cent in the previous quarter.

The non-oil economy — a priority for the government as it looks to open up and transform the country — expanded 4.6 per cent in the three months through December on an annual basis. That compared to a revised 4.3 per cent growth in the prior quarter.

The oil industry, still the main driver of the economy, grew 3.4 per cent compared to a revised 0 per cent in the third quarter.

The Middle East’s biggest economy is spending heavily on diversifying the economy under Crown Prince Mohammed Bin Salman’s Vision 2030 strategy. The kingdom has projected budget deficits through at least 2027 as it chooses to spend on its diversification at the same time the government is facing lower oil receipts.

The International Monetary Fund downgraded its growth forecasts for the kingdom by 1.3 percentage point to 3.3 per cent for this year, citing the decision by the OPEC+ oil alliance to extend production cuts.

The government also slashed its own forecasts in September and sees growth at 4.6 per cent this year, and 3.5 per cent for 2026. Growth of close to 4 per cent over the next few years would still outpace most other growth in Group-of-20 nations.