Q2 income from non-oil sectors in Saudi Arabia reaches $40 billion, aligning with oil-related earnings
In the second quarter of 2025, Saudi Arabia's non-oil sector experienced significant growth, driven primarily by government-led Vision 2030 projects and ongoing economic diversification efforts. The sector expanded by 4.7% year-on-year, contributing 2.7 percentage points to GDP growth, outpacing the oil sector's expansion.
The growth in the non-oil sector is a testament to the success of Vision 2030, a reform initiative designed to promote investments and initiatives across sectors outside oil. Robust domestic demand has supported increased activity in non-oil industries, with the sector's share of GDP growth (2.7 percentage points) much larger than oil's share (0.9 points) on an annual basis.
This growth has also resulted in a structural shift in government income. For the first time, non-oil revenues have surpassed oil revenues, accounting for almost half of government income. This marks a significant step forward in Saudi Arabia's efforts to reduce oil dependency.
The growth in the non-oil sector has been most evident in the private and diversified sectors, with government activities growing modestly but less significantly. Despite an increase in oil production in 2025, the non-oil expansion remains the primary growth engine.
The fiscal data also shows that government expenditures fell 8.9% year on year to SR336.13 billion. Oil income decreased by 28.76% in the same period, totaling SR151.73 billion compared to SR213 billion a year earlier. The fiscal deficit is anticipated to peak at 4% of GDP in 2025 before narrowing to around 3.2% by 2030.
The shift in revenues is attributed to two main drivers: Saudi Arabia's economic diversification push under Vision 2030, and the voluntary oil production cuts implemented under OPEC+ agreements in late 2023. The largest contributor to non-oil income was taxes on goods and services, accounting for 50% of the total. Other taxes, primarily corporate zakat, totaled SR26 billion, while income, profit, and capital gains taxes generated SR13.73 billion.
The Kingdom's non-oil revenues are approaching parity with oil income, making the fiscal structure increasingly resilient to energy price volatility. The IMF projects growth in the non-oil economy to reach 3.4% in 2025, supported by robust domestic demand fueled by government-led Vision 2030 projects and solid credit expansion.
Overall, real GDP is expected to rise 3.6% in 2025, aided by the gradual reversal of OPEC+ production cuts. The second quarter of 2025 closed with a budget deficit of SR34.53 billion, a 41% decrease from the first quarter deficit but a 125.11% increase compared to the same quarter last year. The total deficit for the first half of 2025 amounted to SR93.23 billion, fully funded through borrowings.
End-of-period public debt reached SR1.39 trillion, showing a 14.1% annual increase. 62.84% of the public debt is classified as domestic, while 37.16% is external. The Kingdom's non-oil revenues increased by 6.6% in Q2 2025, reaching SR149.86 billion ($39.96 billion).
In conclusion, the growth in Saudi Arabia's non-oil sector in Q2 2025 is a clear indication of the success and ongoing progress of the country's economic diversification under Vision 2030. The resilience and momentum generated from multiple non-oil sources highlight the Kingdom's commitment to reducing oil dependency and fostering a more balanced and sustainable economy.
- The non-oil sector's 4.7% growth in the second quarter of 2025 is a testament to the success of Saudi Arabia's Vision 2030, an initiative aimed at promoting investments and initiatives across various sectors, including technology, industry, and art.
- The robust domestic demand in Saudi Arabia has been a significant factor supporting increased activity in the non-oil sport and business sectors, leading to a large 2.7 percentage point contribution to the country's GDP growth.
- The growth in the non-oil sector has led to a structural shift in the Saudi Arabian government's income, with non-oil revenues surpassing oil revenues for the first time, accounting for almost half of the government income.
- The largest contributor to Saudi Arabia's non-oil income in the second quarter of 2025 was taxes on goods and services, which accounted for 50% of the total, followed by other taxes, primarily corporate zakat, totaling SR26 billion.
- The IMF projects growth in the non-oil economy of Saudi Arabia to remain strong, reaching 3.4% in 2025, attributable to the resilience and momentum generated from multiple non-oil sources,such as finance, economics, and business, indicating a further reduction in oil dependency and fostering a more balanced and sustainable economy.
