Saudi Arabia’s 2022 GDP breaks record, exceeds $1 trillion

Saudi Arabia achieved real gross domestic product (GDP) growth of 8.7% in 2022, according to a government report on Thursday, with its total GDP exceeding $1 trillion for the first time in the country’s history. 

The country’s General Authority for Statistics (GASTAT) highlighted that this growth rate is the highest the kingdom has experienced in more than a decade, according to its report and to national indicators after the fourth quarter. 

The data and statistics agency attributed this growth and breaking its GDP record of over $1 trillion dollars to the country’s increased economic industry diversification away from relying on oil production and exports, falling in line with the country’s 2030 vision. 

Crude oil and natural gas activities remained the biggest contributor to the GDP at 32.7%, while government services followed at 14.2%. 

Manufacturing activities other than oil refining followed at 8.6%, and wholesale and retail trade activities along with restaurants and hotels contributed 8.2%. 

The results of the report revealed positive growth in non-oil sectors by 5.4% compared to the year before. Transportation, storage and communications activities had the highest growth rates in non-oil activities at 9.1%, and manufacturing activities, except for oil refining, followed suit at 7.7%. 

The Organization for Economic Cooperation and Development (OECD), made up of 38 member countries to stimulate economic progress and world trade,  identified Saudi Arabia as the fastest growing among major world economies in the first quarter of last year. 

Its economy grew 2.6% quarter-on-quarter in the first three months of 2022; this was higher than any of the 19 countries and the European Union that make up the Group of 20 (G20). 

The G20 members make up around 85% of the global GDP, 75% of global trade and about two-thirds of the world population, according to the intergovernmental forum’s website. 

The OECD recognized that the Saudi economy had been gathering steam on the back of higher oil prices in the first quarter, leading the recovery of the global economy from the COVID-19 pandemic. 

In a November report, the OECD predicted that Saudi Arabia’s GDP will slow its growth in 2023 to about 5% and even more so in 2024 to 3.5%, and the kingdom will lose its position as the fastest growing to India this year and the next.

World GDP growth for 2023 is expected to average at 2.2%, the OECD estimated. 

The intergovernmental organization attributes a combination of tighter monetary policies and higher real interest rates, the ongoing Russia-Ukraine crisis, along with high energy prices, weak net-household income growth and overall declining confidence in the global economy as major contributors that will hinder growth in 2023. 

It states that while economic growth in the United States and Europe is slowing sharply, Asian emerging market economies are expected to make up about three-fourths of global GDP growth this year.