Saudi Non-Oil Growth Speeds Up Amid Oil Economy Slump

Saudi Arabia's non-oil private sector growth accelerated to its fastest pace in six months in August, despite the country's oil economy contracting at a rate of 4.8% in Q2.

The Riyad Bank Saudi Arabia PMI, compiled by S&P Global, rose to 53.8 in August from 53.1 in July, marking its sixth consecutive month of expansion. Output growth hit a seven-month high as firms drew on stronger domestic demand, while new export orders fell due to regional tensions.

The divergence between non-oil and oil growth matters, as Saudi Arabia's Vision 2030 strategy relies on the private sector driving economic growth despite fluctuations in the oil market. While Brent crude prices have risen by around 40% year-on-year to about $95 a barrel, production constraints and war risks are causing volume rather than price to be the issue.