Non-Oil GDP Growth Rate — Progress Tracker

Current Status

On Track — the Saudi Vision 2030 non-oil GDP target is a sustained 4-5 per cent real growth corridor, and the Kingdom has recently operated inside that band. Non-oil GDP grew approximately 4.5 per cent in real terms in 2024 on the rebased GASTAT methodology, and the 2025 Vision 2030 Annual Report puts the non-oil activities share at 55 per cent of real GDP with 4.9 per cent non-oil growth in 2025. The question for analysts is no longer whether non-oil growth can sustain but whether the composition is shifting toward genuinely tradable, productivity-enhancing activity or remains anchored to government-funded construction and consumption cycles.

Key Metrics

Definition and Methodology

Non-oil GDP growth is the headline diversification indicator and is calculated by the General Authority for Statistics (GASTAT) as the year-on-year percentage change in real value added from every economic activity except crude petroleum and natural gas extraction. The series is published quarterly with annual consolidation, expressed in constant prices, and seasonally adjusted to control for the effects of Ramadan, Hajj, and the school calendar. Sectoral decompositions are released alongside the headline number — covering 134 industry groupings under the post-2025 classification (up from 85 previously) — which permits a granular read on which non-oil activities are doing the work each quarter.

The methodological landscape changed materially in May 2025. GASTAT released a comprehensive rebase, moving the reference year from 2018 to 2023, integrating chain-linked real GDP enhancements first published in 2024, and folding in recommendations from IMF technical assistance missions conducted between 2019 and 2024. The rebase backcasted the historical series, so the 2017-2024 record is now reported on a consistent post-rebase basis. The critical editorial rule is that growth rates, real-GDP contribution shares, current-price contribution shares, and private-sector GDP contribution cannot be treated as the same metric. The official 2025 Vision 2030 headline reports non-oil activities at 55 per cent of real GDP; this page uses that definition when discussing share-of-GDP progress.

Any direct comparison of pre-2025 data with post-rebase figures requires care. The Vanderbilt Portfolio uses the rebased series for 2017-2025 and flags pre-rebase legacy figures where they appear in older commentary. The IMF, in its 2025 Article IV consultation, accepted the rebase as broadly consistent with international best practice, providing external validation for benchmarking against peers.

Year-by-Year Track Record

The decade-long trajectory of non-oil growth maps neatly onto three phases of Vision 2030 implementation: a fiscal-consolidation trough (2016-2017), a build-out phase (2018-2019), and the accelerated post-pandemic delivery cycle (2021-2025). The pandemic itself sits between phases two and three as a one-year contraction.

The 2016 baseline is the most important reference point because it captures the depth of the diversification challenge at the moment Vision 2030 was unveiled. Non-oil growth was 0.2 per cent — effectively zero — as the economy absorbed subsidy cuts, expat departures, and a 70 per cent decline in oil revenues from the 2014 peak. The fact that the non-oil economy has averaged a 4.5 per cent post-pandemic pace despite a fiscal posture that remains tighter than the pre-2014 era is the clearest single piece of evidence that the diversification programme is producing structural, not just cyclical, results.

The pandemic year is instructive in a different way. A 2.5 per cent contraction in 2020 — milder than the 6 to 8 per cent declines suffered by most advanced economies — reflects both the size of the government-funded share of the non-oil economy (which acts as a buffer) and the early reopening of construction. The V-shaped recovery into 2021 and 2022 was partly base effects, but private-sector hiring data from the General Organisation for Social Insurance (GOSI) confirms that the bounce was real and broad-based, not just a statistical rebound.

Sector Drivers

The single most important lens on non-oil growth is the sectoral decomposition, because the headline rate alone cannot distinguish between government-financed construction (which depends on oil revenue) and genuinely diversified private activity (which does not). The latest GASTAT data offer a clearer read than was possible pre-rebase.

Three observations follow. First, wholesale and retail trade, restaurants, and hotels is now the largest absolute contributor and the fastest-growing major sector, expanding 6.4 per cent in 2024. This composite captures the tourism effect — Saudi Arabia welcomed 122 million domestic and international visitors in 2025 with SR300 billion in tourism spending — but it also reflects the underlying expansion of Saudi consumer spending as Saudisation lifts household incomes and the share of working-age women in the labour force continues to rise.

Second, financial services has outgrown both manufacturing and government services in each year since 2022, which is the cleanest signal in the data that the economy is shifting toward higher-productivity activity. The combination of mortgage-market deepening, Tadawul international index inclusion, the rise of fintech licensees, and the asset-management expansion driven by sovereign wealth deployment is creating a service-sector engine that did not meaningfully exist in 2016.

Third, construction at 5.5 per cent growth in 2024 reflects the giga-project pipeline (NEOM, The Red Sea, Qiddiya, Diriyah, Roshn, and the Riyadh metro and World Cup 2034 stadiums). This is double-edged. Construction is non-oil and counts toward diversification, but its dependence on the public investment pipeline means it is the least diversified of the headline drivers — it is the channel through which oil revenues are recycled into the non-oil economy. The IMF Article IV mission has consistently flagged this concentration risk.

The fastest marginal-growth segments — at over 15 per cent annually in some cases — sit inside the broader categories: e-commerce within retail, fintech within financial services, hotel and event hospitality within trade, and the digital economy more broadly. These are the most promising candidates for sustaining a 4-5 per cent corridor as the construction cycle inevitably matures.

Comparison vs Oil GDP

The contrast between non-oil and oil GDP is what makes the non-oil rate the cleanest barometer of Vision 2030 progress. Oil GDP swings dramatically with OPEC+ production decisions and global oil prices, while non-oil growth has held a narrow corridor regardless of either.

In 2022, oil GDP growth was 15.4 per cent on the back of price spikes following Russia’s invasion of Ukraine and the unwinding of OPEC+ cuts; in 2023 and 2024, it contracted as voluntary production cuts deepened. Across the same three-year window, non-oil growth varied within a 0.9 percentage point band. That stability is the diversification dividend. It also explains why headline real GDP — which combines both — looks far more volatile than the underlying transformation: 2024 headline GDP grew only 1.3 per cent because the oil sector contracted, even though the non-oil economy was expanding at four times that pace.

The implications for Aramco, PIF, and the broader fiscal arithmetic are substantial. The longer the divergence persists, the more the productive base of the economy decouples from oil-market shocks, and the more of Saudi Arabia’s growth story can be told without reference to crude prices. That is the entire point of Vision 2030.

Vision 2030 Target

The Vision 2030 framework articulates two related but distinct targets that depend on non-oil growth.

The first is the non-oil share of total GDP, originally set to rise from a mid-40s baseline to 65 per cent by 2030. The latest official Vision 2030 reporting shows non-oil activities at 55 per cent of real GDP in 2025. That is clear progress, but it is not the same as private-sector GDP contribution or nominal/current-price GDP composition, and those figures should not be merged into a single headline number.

The second target is the private-sector share of GDP, set to rise from 40 per cent at 2016 baseline to 65 per cent by 2030. This is structurally the harder target because it requires genuine private-sector capital deployment, not just government spending channelled through state-linked entities. The 2025 figure is 51 per cent, up from 44 per cent in 2016 — meaningful progress but still short of the 65 per cent goal with only five years remaining. The Saudi Vision 2030 Annual Report for 2024 noted that 93 per cent of KPIs met their 2024 targets, but the private-sector contribution is one of the few headline targets where the gap remains material.

The third related target — though not always treated as a Vision 2030 KPI — is non-oil revenue as a share of government income, which is what determines whether the diversification narrative translates into fiscal sustainability. See Non-Oil Revenue for the full tracker.

What’s Working

Three structural shifts are the strongest evidence that the non-oil expansion is durable rather than cyclical.

First, household credit and mortgage expansion. The mortgage stock grew from approximately SR104 billion in 2016 to over SR700 billion by 2024, a roughly 7x expansion that has both supported residential construction and lifted household consumption capacity. This was an explicit policy choice — the Real Estate Development Fund refinance, Saudi Real Estate Refinance Company (SRC), and the home ownership programme collectively engineered the mortgage-market deepening — and it has produced exactly the broad-based consumer-led growth that the non-oil economy needed.

Second, labour-market formalisation and Saudisation. The non-oil economy has absorbed millions of net new private-sector hires since 2017, with the Saudi national unemployment rate falling from over 12 per cent in 2017 to 7.2 per cent in Q4 2025. Crucially, female labour-force participation has roughly doubled from approximately 17 per cent in 2017 to about 35 per cent in 2025, which has expanded the productive base of the economy and added to consumption power simultaneously. See the Female Labour Force Participation tracker for the underlying series.

Third, non-oil exports and the manufacturing base. While still small in absolute terms, non-oil exports — petrochemicals, basic metals, processed food, electronics — have grown at a compound rate above 8 per cent per annum since 2017, driven by the National Industrial Development and Logistics Programme (NIDLP) and supported by the SAUDIA EXPORT and Saudi Export-Import Bank (Saudi EXIM) regime. This is the segment most likely to be genuinely productivity-enhancing — it is exposed to global competition and not subsidised by the domestic price umbrella — and it now represents a meaningful slice of manufacturing output.

What’s Not

Three concerns merit equal weight.

First, the construction share is too high. Roughly a quarter of post-2021 non-oil growth has come from construction and real estate combined. Both sectors are heavily dependent on the giga-project pipeline and the mortgage policy stack. As construction matures and the marginal pipeline shrinks toward 2030 delivery dates, this contribution will fade, and absent a successor driver, the headline non-oil rate could compress toward 3 per cent in the late 2020s.

Second, non-oil productivity gains have been limited. Most of the non-oil growth has come from rising labour input — more workers, longer hours, higher female participation — rather than from output per worker. The IMF’s 2025 Article IV staff report flagged this explicitly, noting that fiscal space tightening will eventually constrain the input-led growth model unless productivity catches up. A 4-5 per cent non-oil growth corridor that depends entirely on labour expansion is structurally fragile.

Third, the indirect oil exposure is larger than the headline implies. The IMF estimates that a 10 per cent change in oil price corresponds to roughly a 0.5 per cent change in non-oil sector GDP, mediated through fiscal spending, PIF deployment, and consumer confidence channels. The non-oil economy is not decoupled from oil; it is loosely correlated. This matters because the 2025 oil price (~USD 65 per barrel average) sits well below the Saudi fiscal break-even (~USD 94 in 2025, projected to fall to ~USD 88 in 2026), which means the fiscal cushion that has supported non-oil growth through 2021-2024 is thinning.

Risks

The risk surface for sustaining 4-5 per cent non-oil growth through 2030 has four main components.

Oil price persistence below USD 70. At current oil prices, the fiscal deficit widens to approximately 5 per cent of GDP in 2025 and remains around 4 per cent in 2026. The Saudi response has been to lean on borrowing — the 2026 budget plans roughly USD 57 billion of new borrowing against a USD 44 billion deficit — but sustained low prices would force either deeper spending cuts (which would slow construction-led non-oil growth) or further leverage (which raises sovereign-debt servicing costs). Either path tightens the runway.

Giga-project execution risk. The 2030 delivery cycle for NEOM, Qiddiya, The Red Sea, and Diriyah requires both completion of physical infrastructure and successful tenant/visitor economics post-opening. Slippage on either dimension reduces the construction-cycle contribution earlier and the operational-revenue contribution later.

Labour-market capacity constraints. Saudisation requirements, when set above absorption capacity in specific sectors, generate friction that suppresses hiring rather than substituting national workers for expatriates. The current Saudi national unemployment rate around 7 per cent is approaching the lower bound of what is structurally achievable without significant productivity investment, and additional labour-force expansion will rely on female participation gains and demographic flow rather than rapid declines in unemployment.

Geopolitical disruption. Regional instability — including periodic flare-ups around the Strait of Hormuz, Yemen-related tensions, and broader Middle East security dynamics — affects both tourism arrivals and the cost of capital for FDI. The 2025 Allianz Trade and Coface country risk assessments both flagged geopolitical risk as a structurally elevated overlay on the Saudi macro story.

2030 Outlook

Sustaining 4 to 5 per cent non-oil growth through 2030 remains the Vanderbilt Portfolio baseline, with risks weighted slightly to the downside. The investment pipeline is substantial — total Vision 2030 project commitments now exceed USD 1.3 trillion — and the maturation phase of the giga-projects will produce its own non-oil revenue streams as visitor and tenant economics begin to compound.

The composition of growth, however, is likely to shift. Construction’s contribution will fade after the 2030 delivery wave, and the question for analysts is whether tourism, financial services, manufacturing exports, and the digital economy can collectively absorb the slack. The post-rebase data is broadly encouraging on this point: financial services growth at 5.7 per cent, trade and hospitality at 6.4 per cent, and electricity and utilities at 4.9 per cent are all now outgrowing the headline rate, which is the pattern needed for a graceful transition.

For the 2030-2040 horizon, sustained growth depends on three things the current cycle has not yet fully demonstrated: (1) measurable productivity gains, particularly via digital transformation and education reform outcomes feeding the labour market; (2) genuine private-sector capital formation independent of state-linked anchor investors; and (3) the maturation of Tadawul and the broader capital-markets stack into a regional financing hub that competes with the DIFC and London for MENA-focused listings and asset management mandates. The Vanderbilt Portfolio’s central forecast is 4.0 to 5.5 per cent average annual non-oil growth through 2030, slowing modestly to 3.5 to 4.5 per cent in the 2030-2035 window, with high confidence that the diversification ratchet — once established — does not reverse.

The headline number to watch in the meantime is not annual non-oil growth but the quarterly seasonally adjusted rate, which tracks the cycle without the year-over-year base effects. Both the IMF and GASTAT publish these series; both confirm that the post-pandemic non-oil expansion is the longest sustained period of broad-based diversification growth in Saudi Arabia’s modern economic history.

Related Trackers

Non-oil GDP growth is the engine that drives multiple Vision 2030 targets simultaneously. It generates private-sector employment (Unemployment Rate), creates the tax base for fiscal diversification (Non-Oil Revenue), attracts foreign investment (Inbound FDI), and expands the private sector’s economic role (Private Sector GDP Contribution). It also supports social outcomes: income growth from non-oil employment improves household welfare (World Happiness Index), enables home purchases (Home Ownership Rate), and funds discretionary spending (Household Cultural Spending). The NIDLP, NTP, and sector-specific programmes are all designed to sustain and accelerate non-oil growth.

Sources

Primary data: GASTAT quarterly national accounts and the May 2025 rebase; IMF 2025 Article IV Consultation; World Bank Saudi Arabia Macro Poverty Outlook; Saudi Vision 2030 Annual Reports; SAMA Quarterly Economic Reports. All growth rates reference the post-2025 rebased GASTAT series unless otherwise noted; pre-rebase figures may differ by 0.2-0.4 percentage points.