Arab News, Tue, May 28, 2024 | Dhu al-Qadah 20, 1445
Saudi Arabia’s non-oil sector to grow by 4.8% in 2024: Riyad Capital
Saudi Arabia:
Saudi Arabia’s non-oil sector is projected to grow at a rate of 4.8 percent in
2024, driven by the Kingdom’s growth-oriented fiscal policy, according to an
analysis.
In its latest report, Riyad Capital stated that
the sector will accelerate further in 2025, with a projected expansion rate of
5.2 percent.
“We project continued solid growth for non-oil
activities, fostered by a growth-oriented fiscal policy with a focus on
increased investment spending, which will spur growth in the coming years,”
stated Riyad Capital.
This follows a trend where non-oil activities
experienced a rise of 5.6 percent and 4.4 percent in 2022 and 2023,
respectively.
Developing the sector is crucial for the Kingdom
as it steadily pursues its Vision 2030 goals to reduce dependency on oil.
According to the report, Saudi Arabia's overall
economic growth is poised to rebound in the coming years, with the nation's
gross domestic product expected to expand by 2.3 percent in 2024 and accelerate
to 5.8 percent in 2025.
The analysis projected that the Kingdom’s fiscal
deficit could shrink to 3 percent and 1.8 percent of GDP in 2024 and 2025,
respectively.
“After a surplus of 3.2 percent of GDP in 2023, we
expect the current account balance to rise again to 3.7 percent of GDP in 2024.
It will further expand to 4.9 percent of GDP in 2025 on the back of notably
higher projected oil export revenues next year,” said Riyad Capital.
On the other hand, the inflation rate in the
Kingdom is expected to decline to 2 percent in 2024 and witness a moderate
acceleration to 2.4 percent in 2025.
Riyad Capital also expects Saudi Arabia’s oil
production to reach more than 10 million barrels per day over the next 18
months.
“We expect oil production to expand again above 10
mbd in the course of the next 18 months, with the better part of this increase
taking place in 2025. Therefore, the oil sector GDP contribution will still be
mildly negative in 2024 with –2.2 percent, but record substantial growth of 8.7
percent in 2025,” said the report.
The analysis further pointed out that global oil
prices are expected to remain volatile but at elevated levels, with Brent crude
to fall in a range between $80 and $90 in 2024 and 2025.