Saudi Arabia’s economy expanded by 3.9% year-on-year in the first quarter of 2023, according to preliminary data released by the General Authority for Statistics on Sunday.
The growth was driven by a strong recovery in the non-oil sector, which grew by 5.8% compared to the same period last year, while the oil sector grew by 1.3%.
The non-oil sector was boosted by the easing of COVID-19 restrictions and the implementation of various stimulus measures by the government to support businesses and households.
The government services sector, which includes health, education and public administration, grew by 4.9%, while the private services sector, which includes trade, transport and communication, grew by 6.2%.
The construction sector also recorded a robust growth of 8.7%, reflecting the progress of several mega-projects under the Vision 2030 reform plan.
The oil sector, however, saw a slowdown in growth compared to the previous quarter, when it grew by 4.8%. This was mainly due to the voluntary production cuts agreed by Saudi Arabia and other OPEC+ members to balance the global oil market.
The seasonally adjusted real GDP contracted by 1.3% quarter-on-quarter in Q1, as a result of the decline in oil activities.
The International Monetary Fund (IMF) has projected that Saudi Arabia’s economy will grow by 3.1% in 2023, after contracting by 8.7% in 2022 due to the impact of the pandemic and lower oil prices.
The IMF has also praised Saudi Arabia’s fiscal and monetary policy response to the crisis, which helped mitigate the economic and social costs.
Saudi Arabia is the largest economy in the Arab world and the biggest oil exporter globally.
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