Saudi GDP grows 3.4% in Q1, outpacing flash estimates 

Saudi Arabia’s economy grew more than expected in the first quarter of 2025, on non-oil and government activities, beating earlier government estimates. 

The kingdom’s first quarter gross domestic product (GDP) grew 3.4% year-on-year, beating flash estimates of 2.7% suggested by the country’s General Authority for Statistics in May. 

The growth was driven in part non-oil activities, which rose 4.9%, beating earlier estimates of 4.2%. Government activities grew 3.2% mirroring last month’s forecast

Oil growth contracted by 0.5%, improving against a 1.4% decline projected in May. 

Wholesale and retail trade, restaurants, and hotels recorded the highest growth rates during the first quarter of 2025, reaching 8.4% year-on-year and 0.7% quarter-on-quarter.

Saudi Arabia recorded strong employment growth since the start of the year, with jobs growing at the fastest pace in Q1 in over 12 years, according to a Riyad Bank survey. 

The seasonally adjusted Saudi Arabia Purchasing Managers’ Index rose to 58.1 in March, dipped to 55.6 in April and rose marginally in May to 55.8, but remained much lower than the recent peak of 60.5 at the start of the year. 

The International Monetary Fund lowered the kingdom’s 2025 GDP forecast to 3% in April, 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 May that the kingdom needs Brent at north of $92 a barrel this year to balance its budget. Oil will average $66.94 a barrel in 2025 and $62.38 a barrel next year, according to IMF’s regional economic outlook released last month.