Saudi economic diversification yields $billions in non-oil growth
It seems that the Kingdom’s efforts to divert economic revenue away from oil is paying off, new data reveals. Could the Kingdom be well on the right path to achieving Vision 2030?
Q2 figures are solid
The Ministry of Finance released its quarterly report last week, revealing very solid numbers for Q2 2018.
Saudi Arabia’s total revenues for the period summed up to $72.94 billion, an increase of 67% over the same quarter last year, the report revealed.
Non-oil revenues for the second quarter amounted to $23.8 billion, a growth rate of 42% compared to the same quarter last year, a Saudi Press Agency quoting the ministry’s quarterly report said.
“The announced second quarter 2018 financial figures reflect the improvement in the public finances performance, which will lead us to continue our reform plans aimed at achieving economic diversification and financial sustainability,” Saudi Minister of Finance Mohammed Al-Jadaan said.
Oil revenues during the quarter amounted to 49.1 billion, a growth rate of 82% compared to the same quarter last year, driven by improved oil prices in the world markets, Trade Arabia posited.
Total revenues in H1 reached $113.3 billion, an increase of 43% year-on-year.
The reforms driving positive change
The implementation of 5% VAT at the turn of the year could be one of the driving forces behind these positive figures. The Saudi government could expect even greater numbers for Q3 and Q4, as the ban on women driving was finally lifted in late June. This is expected to lower unemployment rates in the country and to bolster several sectors, such as the insurance and automobile sectors.
The Saudi Public Investment Fund (PIF) has become famous for investing in forward-oriented tech companies, branching Saudi’s investments in a wide range of ventures that will secure the Kingdom a place in the future.
The improvement in financial performance was also accompanied by an outgrowth in economic performance, where real GDP grew by 1.2% in the first quarter of this year, and the non-oil sector grew by 1.6%, Al-Arabiya reports.