Saudi Arabia is pacing towards building a non-oil reliant economy and the steps it's taking to reach this goal are surely paying off.
According to data released on Sunday by the kingdom's General Authority for Statistics, the country's non-oil economy grew by 3.3 percent last year, the fastest recorded growth rate since 2014.
The country's retail, hotel, and financial sectors can be credited with being the major reasons behind the increase in output as they are the industries attracting the most investments so far.
The most recent data highlights a continued decline in the Gulf state's oil sector, which decreased by 3.6 percent in 2019. This dragged the overall GDP growth to 0.3 percent, down from the >2.4 percent reported a year earlier.
This lack of growth is a further indicator of how important it is that the kingdom is trying to offset oil-related losses via building new revenue-generating industries and platforms.
In a comment to Arab News, chief economist at Abu Dhabi Commercial Bank Monica Malik spoke of this decline, saying:
"The weakness in the real headline GDP growth was due to the construction in the oil sector."
The executive didn't only focus on the negatives though, she also made sure to highlight the major leap in non-oil economic activity.
"Positively, non-oil activity expanded at the fastest pace since 2014 thanks to a strengthening in non-oil growth. We believe that higher investment growth will remain a key support factor for non-oil activity in 2020 with greater progress with key projects," she added.
Despite the slump in oil prices, Saudi Arabia's GDP in 2019 still went up by about 0.8 percent from 2018.
The country's oil exports have been hit
A weakening demand for oil on a global level majorly affected the kingdom's exports in 2019, which went down by 10.4 percent compared to 2018.
At this point, crude petroleum and natural gas continue to account for most of the kingdom's exports (27.4 percent). This is followed by government services, which stand at 19.4 percent.
"Wholesale and retail trade, restaurants and hotels made up the third largest contributor to GDP, accounting for a 10 percent share," according to Arab News.
Major >dips in oil demand and prices have been occurring for years now and have majorly >affected Saudi Arabia.
Amid the changes, the kingdom started working on diversifying its economy. In recent years, the country's Crown Prince Mohamed bin Salman launched Vision 2030, an ambitious blueprint that mainly aims at shaking up the local economy. Under it, the country has focused on bolstering sectors that can generate revenues for the kingdom. These include leisure >tourism, >entertainment, and >sports.
The Gulf nation is also planning on boosting its gas production to help offset the impact of lower oil sales. The kingdom >recently announced that state-owned Saudi Aramco is investing a whopping $110 billion to develop an unconventional and vast gas field.