In Q1 of 2023, Saudi Arabia's economy expanded by 3.9% YoY, thanks to non-oil sector growth as part of its diversification efforts. According to initial estimates released by the General Authority for Statistics on Sunday, non-oil activities increased by 5.8% while oil activities rose by 1.3%. Government services activities also saw a 4.9% YoY increase in the first quarter.
- Saudi Arabia's economic growth was slower than the 5.5% expansion in Q4 2022, largely due to a drop in oil activities. Oil activities rose by 6.1% in Q4 but only increased by 1.3% in January-March. To maintain oil market stability, OPEC+ has agreed on voluntary output cuts of 1.16 million barrels per day.
Why it matters
As part of its Vision 2030 initiative to diversify its economy, Saudi Arabia is heavily investing in non-oil sectors such as tourism, hospitality, aviation, logistics, advanced manufacturing, and technology. The country aims to add 315,000 new hotel rooms by 2030, costing $37.8 billion, and bring the total stock to around 450,000 rooms. According to the Knight Frank 2023 Saudi Report, giga-projects like the futuristic Neom city are driving the hotel supply pipeline.