Saudi Arabia's non-oil sector growth decelerates, remains strong

(MENAFN) In June, Saudi Arabia's non-oil sector experienced its slowest growth rate in two and a half years, according to the latest data from the Riyad Bank Purchasing Managers' Index (PMI). The PMI, adjusted for seasonal variations, dropped to 55 from May's 56.4, marking its lowest level since January 2022. Despite this decline, the index remains above the crucial 50-point threshold, indicating expansion in economic activity.

A notable decrease was observed in the new orders index, which fell to 56 in June from 59.5 in May. This decline in new orders contributed to the overall moderation in growth for the non-oil sector. Additionally, while there was an increase in the production sub-index, job creation slowed during the period.

Naif Al-Ghaith, senior economist at Riyad Bank, commented on the second-quarter performance, noting that despite the recent moderation in growth indicators, the non-oil GDP outlook for Saudi Arabia remains positive. Growth projections for the second quarter suggest a robust expansion exceeding three percent, supported by sustained high levels of production, stable supply chains, and a steady albeit moderate pace of job creation.

Al-Ghaith emphasized the resilience of Saudi Arabia's non-oil economy, highlighting its ability to navigate challenges and maintain expansionary momentum. Despite the slower pace recorded in June, indicators suggest a stable foundation for continued growth in the coming months, underpinned by ongoing economic reforms and strategic initiatives aimed at diversifying the kingdom's economic base. 

MENAFN03072024000045015682ID1108402956