Our in-depth, independent reports cover the macroeconomic environment, the Saudi government’s annual budget, and Saudi Arabia’s monetary and financial developments, labor market, and inflation.
Saudi Arabia’s non-oil economy continues to expand at a brisk pace. The authorities’ preliminary estimate puts non-oil GDP growth at 4.6 percent in 2023 and we see an acceleration to 5 percent-plus in the next two years. Growth will be driven by both consumption and investment, with net exports a drag—at least this year. Consumer price inflation should remain contained, though project cost overruns are likely.
Domestic demand in the Kingdom remains very strong, driven by a booming projects market and firm consumption growth. Following a comparatively soft patch in Q3, the non-oil economy is picking up pace again, thanks in part to an acceleration in central government spending. We expect non-oil GDP growth to reach 5.1 percent this year and 5.2 percent in 2024.
The government projects total expenditure for 2024 at SR1.25 trillion, which is 11 percent above the projection made in the 2023 budget, when spending was forecast to reach SR1.13 trillion next year. The projection for 2025 also rises—to 1.3 trillion, which is a substantial 15 percent higher than the forecast made last year. Despite this, the authorities expect 2024 spending to fall compared to the estimate of 2023 spending, which has been put at 1.28 trillion.