Saudi Arabia achieves strong growth across all sectors in Q1: ministry

Saudi Arabia achieved strong growth across all sectors despite global economic headwinds, with non-oil and oil business activities contributing significantly to the Kingdom’s real gross domestic product in the first quarter of 2023, according to a government report.

In its quarterly economic report, the Ministry of Economy and Planning noted that the real GDP of the Kingdom witnessed an annual growth of 3.4 percent in the first quarter ended in March. This growth was driven by a substantial increase in non-oil activities, which grew 5.4 percent during the same period.

Strengthening the non-oil sector is crucial to Saudi Arabia’s economic diversification agenda under Vision 2030, and the industry booked SR68.1 billion ($18.15 billion) in exports in the first quarter.

“The impressive performance of the non-oil private sector has played a key role in sustaining optimism for the future,” said the ministry in the report.

The report added that government services also contributed to the growth of the Saudi economy, accounting for 14 percent of the real GDP and achieving a 5 percent annual growth during the first quarter.

“Despite the challenges facing the economies of the world represented by tightening interest rates and high uncertainty and their negative impact on the performance of global markets, the non-oil private sector in the Kingdom and markets and businesses witnessed clear improvements,” added the ministry.

Rise in government revenues

The report further noted that the government’s revenue rose 1 percent year on year in the first quarter to reach SR280.94 billion.

Meanwhile, its expenditure increased by SR238.85 billion or 29 percent in the first quarter, compared to the same period in the previous year.

According to the report, the trade balance recorded a surplus of SR127.1 billion in the first quarter, compared to an excess of SR209.2 billion for the same period in 2023, marking a drop of 39.2 percent.

The ministry noted that this decline was driven by an increase in imports of 18.1 percent and a decrease in exports of 14.6 percent annually in the first quarter.

Falling unemployment rate

Reducing the unemployment rate is another major goal outlined in Saudi Arabia’s Vision 2030, and the latest quarterly report indicates that the Kingdom is moving in the right direction.

Between January and March, the unemployment rate for Saudis reached 8.5 percent, down from 10.1 percent in the first quarter of 2022.

The unemployment rate among Saudi men decreased to 4.6 percent from 5.1 percent reported in the same quarter of 2022.

On the other hand, the unemployment rate among Saudi women decreased to 16.1 percent in the first quarter of 2023 from 20.2 percent during the same period a year ago.

This came after Saudi Arabia’s unemployment fell to an all-time low of 8 percent in the fourth quarter of 2022. Interestingly, the Kingdom has set a target unemployment rate of 7 percent by 2030.

“The continuous decrease in the unemployment rate among Saudis comes in light of the intensification of the government’s efforts to provide job opportunities for citizens through a series of programs and initiatives, as well as the role of the private sector,” said the ministry.