In 2023, Saudi Arabia experienced a nuanced economic landscape, as reported by the General Authority of Statistics (GASTAT). Despite a 0.9% year-on-year decrease in Gross Domestic Product (GDP), attributed to a significant decline of 9.2% in oil activities, non-oil sectors demonstrated resilience with a robust 4.6% growth, accompanied by a 2.1% rise in government activities.
The decline in oil activities, potentially influenced by the kingdom’s strategic decision to curtail oil production in alignment with OPEC+, underscores Saudi Arabia’s commitment to stabilising global oil markets. Meanwhile, encouraging signs emerged in non-oil sectors, where most economic activities recorded year-on-year growth in the third quarter of 2023.
Noteworthy sectors contributing to this growth include personal, social, and community services, posting a remarkable 11.8% expansion, followed by wholesale and retail trade, restaurants, and hotels with a solid 5.4% growth, and transportation, storage, and communication, witnessing a commendable 5.1% increase.
Amidst this economic backdrop, Saudi Arabia’s Foreign Direct Investment (FDI) demonstrated resilience, with inflows surging by 6% in the first three quarters of 2023 compared to the corresponding period in 2022. Notably, the FDI stock also exhibited a positive trajectory, expanding by 1.4% by the end of Q3 2023 compared to the previous quarter, indicating growing confidence among foreign investors in the Saudi investment ecosystem.
It’s worth noting that the figures released by the Ministry of Investment exclude the Aramco deal in Q1 2022, further underscoring the significant strides made in attracting foreign investment beyond high-profile transactions. This positive trend in FDI signals promising prospects for Saudi Arabia’s economic diversification efforts and underscores its attractiveness as an investment destination amidst evolving global economic dynamics.
