Saudi GDP grows 2.7% in Q1 on higher non-oil activities

Saudi Arabia’s real gross domestic product (GDP) increased by 2.7% year-on-year in the first quarter of 2025, on higher non-oil and government activities. 

Non-oil activities grew 4.2% from the same period last year, while government activities were up 3.2% year-on-year, according to a report released by the Saudi General Authority for Statistics (GASTAT).

Oil activities, which include tasks such as the extraction of crude oil and natural gas as well as refining, dipped 1.4%. 

GDP grew a nominal 0.9% on a quarterly basis, on the strength of government activities which rose 4.9% compared to Q4 2024. Non-oil activities grew 1% while oil activities plummeted 1.2% on a quarter basis.  

Saudi Arabia recorded strong employment growth in the first quarter of the year, with jobs growing at their fastest pace in over 12 years, a Riyad Bank survey showed. However, the seasonally adjusted Saudi Arabia Purchasing Managers’ Index dipped from 58.4 in February to 58.1 in March, the lowest in five months. 

The kingdom posted a budget deficit of 115.6 billion Saudi riyals in 2024, with revenues reaching 1.25 trillion Saudi riyals and expenditure totalling 1.37 trillion Saudi riyals last year. 

The International Monetary Fund lowered the kingdom’s 2025 GDP forecast to 3% last month, down 0.3% from its January projection. It expects the country to grow 3.7% next year, down from its previous forecast of 4.1%.   

The IMF said, in its regional economic outlook for May, that oil will average $66.94 a barrel this year, and $62.38 a barrel in 2026, on the assumption that established policies of national authorities will be maintained. 

The kingdom needs Brent at north of $92 a barrel this year to balance its budget, according to the fund. 

Oil prices plummeted to a new low in May, posting their biggest monthly drop since 2021, on looming fears of a global economic slowdown and effects of the trade war.