The services sector contributed 42 percent to Saudi GDP at constant prices for the year 2021, the “Saudi economy”, with a product worth about 1.1 trillion riyal, while the gross domestic product of all sectors and economic activities in the Kingdom amounted to approximately 2.61 trillion riyal.
According to the monitoring unit of the reports in the newspaper “Al-Iqtisadiah”, and based on official data, the contribution of the services sector to GDP during 2021 is the highest since 1985 when its contribution was 42.6 percent.
The value of the domestic product of service activity increased by 4.7 percent during 2021, an increase of 49 billion riyal from levels of 1.05 trillion riyal in 2020.
The growth of the services sector came at a faster pace than the growth of Saudi GDP at constant prices during 2021, which was 3.2 percent, reflecting a promising future for the local sector.
The highest annual growth rate for the Saudi services sector was historically recorded in 1974, when it reached 35.5 percent.
The services sector is expected to register rapid growth in the coming years in the light of the major tourism and entertainment projects announced within the Kingdom’s Vision 2030, including the Qiddiya project, the Red Sea project and the NEOM project, as well. as the development of the city of Al-Ula, which will contribute billions of riyals to the gross domestic product.
The services sector is one of the most labor-intensive sectors, and therefore the focus on it and its development contributes significantly to solving the unemployment problem.
The sector is also a pillar of economic development, in addition to the growth of the other two sectors that make up GDP, namely “industry” and “agriculture”.
At current prices, the service sector’s GDP in 2021 was about 1.46 trillion riyals, representing 46.7 percent of the economy, compared to 53.9 percent in 2020.
The services sector has grown at 2.7 percent at current prices, as its value was 1.42 trillion riyals in 2020.
The GDP of the services sector includes five main activities: wholesale and retail, restaurants and hotels, transport and storage, information and communication, financial and insurance services, real estate and business services, collective, social and personal services, and fifthly, government services.
The activities that make up the services sector, in terms of the percentage contribution to the sector’s GDP at constant prices in 2021, reached the “public services” activity with a contribution rate of 34.6 percent and a value of about 380, 1 billion riyal.
And government services, related to all government departments, central and local government units, defense, security and justice agencies, units specializing in economic development planning, social welfare planning, education, health, culture and social services, provided free of charge or at a nominal price, and social security bodies.
The second contributor is “financial, insurance, real estate and business services” 25.4%, with a value of 279.3 billion riyal.
And the activity of “financial, insurance, real estate and business services” means two main items: the first is home ownership and includes an estimate of the rent of residential buildings, whether it is paid “to other leases” or calculated “occupied by their owners. ”
The second item represents money services and includes financial and insurance service activities, and includes insurance and reinsurance financing activities and pension funds, while business services include ancillary activities for money and insurance service activities.
As for the third contributor, it is the activity of “wholesale and retail, restaurants and hotels” with a contribution of 21.8 percent and a value of 239.3 billion riyal.
“Wholesale and retail, restaurants and hotels” are divided into two parts. The first is wholesale and retail, meaning the trade of goods purchased with the aim of selling them in the same condition, while hotels and restaurants provide food and lodging.
The fourth contributor is the “Transport, Storage, Information and Communication” activity with a contribution of 13.9 percent and a value of 152.4 billion riyal.
Transport, storage, information and communication activities include road, water, air, pipeline, warehousing, telegraph, postal and telephone services, and include publishing, film production, television programs, sound recordings, radio and information services in.
The activity of “collective, social and personal services” is the fifth component of the service sector, with a contribution of 4.3 percent and a value of 47.1 billion riyal.
And “collective, social and personal services” means household services provided to families among themselves, educational activities, health activities, social work activities, care activities, sports, recreation, leisure, culture and arts activities, shelter activities, libraries and museum activities, and games activities.
Economic Reporting Unit