Saudi Non-Oil Sector Defies Oil Slump with Resilient Growth

Saudi Arabia's non-oil sector has shown resilience in the face of weak oil performance. According to Ahmed bin Nasser Al-Rajhi, deputy chairman of the Saudi Economic Association, this sector grew by about 5% in 2022-2025. This growth indicates a greater independence from oil sector drivers and a reduction in its share of GDP to around 20%, said Al-Rajhi.

This trend is consistent with data showing non-oil sector growth of approximately 5% in the period from 2016 to 2019, when oil prices were lower. Al-Rajhi views economic diversification as a tool for development and resilience against external shocks.

The kingdom's reserve assets stood at $487.3 billion as of August 2026, providing a buffer against external risks. However, Al-Rajhi warned that growing government borrowing and companies' financing needs could put pressure on domestic liquidity, particularly with high interest rates in place. He suggested diversifying funding sources and leveraging international markets to expand access to credit for small and medium-sized businesses.

Experts also emphasize the importance of alternative export and transport routes for economic resilience. The East-West pipeline transports oil from eastern production areas to Yanbu on the Red Sea coast, reducing dependence on sea routes. Tim Callen, former head of the IMF mission in Saudi Arabia, stressed that financial reserves alone are insufficient and that diversification is key to building resilience.