Service sector in GCC countries
According to the macroeconomic theory of sectors, the economy is divided into three main and large sectors: the first; – the sector that is based on collecting raw materials and includes mining companies, timber companies, oil exploration companies, in addition to agricultural and fishing industries. The second sector; – the sector that depends on goods and their sale. such as: (Automotive industry, furniture, clothing trade, etc.). As for the third sector, known as the “services” sector, it is the sector responsible for providing and producing services, relying essentially on intangible things. such as: Entertainment, healthcare, transportation, hospitality, restaurants, etc. This theory states that the more advanced countries become, the more their economies will be based on the third sector, unlike primitive countries, which rely heavily on the primary sector (the United States of America, for example, has a service sector that makes up 85% of its economy).
Kingdom of Saudi Arabia:
- The service sector is a large sector if we look closely at its activities; the sector includes: wholesale and retail trade, restaurants and hotels, transportation, storage, information and communications, financial services, insurance, real estate and business services, collective, social and personal services and finally government services. Below we will present to you the most important indicators of the sector in the Kingdom:
- The service sector’s contribution to Saudi Arabia’s GDP is about 48.2%.
- The “wholesale and retail trade, restaurants and hotels” activity contributes about 10.8% to the GDP.
- The activity of “transport, storage, information and communications” contributes about 6.6% to the GDP.
- The contribution of the “financial, insurance, real estate and business services” activity to GDP is 6.4%.
- As for the activity of “collective, social and personal services”, its contribution to the gross domestic product was 2.5%.
- The contribution of the “government services” activity to the GDP is 21.9%.
- According to the latest statistics, Saudi Arabia issued 100,944 new commercial licenses in the previous year, bringing the total number of commercial activity licenses issued to 348,173. It is worth noting that wholesale and retail trade and repair of motor vehicles and motorcycles accounted for the lion’s share of new licenses, with 48,242 licenses, followed by accommodation and food services with 16,531 licenses, and construction and building activities in third place with 11,521 licenses.
The State of Qatar:
- The value of wholesale and retail trade activity in the State of Qatar is estimated at approximately 50,083 million Qatari riyals.
- The number of establishments operating in wholesale and retail trade reached 11,139 establishments, and the number of workers in these establishments reached 213,954 workers.
- Compensation of workers in the wholesale and retail trade activity reached 11,288,877 thousand Qatari riyals.
- The establishments operating in the hotel and restaurant activity reached 2396 establishments. The number of workers in these establishments reached 78,194 workers.
- Compensation for workers in the hotel and restaurant business amounts to 2,947,431 thousand Qatari riyals.
- Number of mobile phone subscribers in the State of Qatar (regular subscription) 976,015 individuals.
- Number of mobile phone subscribers (prepaid services) 2,941,556 individuals.
- The length of roads paved in the previous year in the State of Qatar was 2224 km.
- The number of driving licenses issued last year was 242,923 licenses.
- Compensation of workers in the transportation and communications sector 24,338,223 thousand Qatari riyals.
- The number of insurance policies issued in the State of Qatar during the past year was 715,897 policies.
- The number of establishments operating in the “business services” activities reached 4,973 establishments.
- The number of people working in “business services” activities is 215,285 people.
- Compensation of workers in “business services” activities exceeds 15,347,819 thousand Qatari riyals.
- The number of workers in “social and personal services” activities in the private sector reaches 80,569 workers.
- Compensation of workers in “social and personal services” activities in the private sector is estimated at approximately 6,127,645 thousand Qatari riyals.
State of Kuwait:
- Wholesale and retail trade contributes about KWD 1,644.3 million to the country’s GDP.
- Restaurant and hotel activities contribute about KWD 418.6 million to the GDP of the State of Kuwait.
- Transport, storage and communications activities contribute about KWD 2,554.5 million.
- The length of paved roads in the State of Kuwait is 91,340,068 m2.
United Arab Emirates:
- Wholesale, retail and repair of motor vehicles and motorcycles contributes 12.3% to GDP (AED 172,288 million).
- Transport and storage activity contributes 5.9% to GDP (AED 82,461 million)
- Accommodation and food services activities contribute 2.3% (AED 32,357 million)
- Information and communications activity contributes 2.9% (AED 41,347 million).
- The contribution of insurance activities to the GDP is estimated at 9.6% (AED 134,773 million).
- The number of insurance policies issued was 7,584,607 policies at the end of last year.
- Wholesale and retail trade activity accounts for 13% of the total workforce in the UAE.
- The transportation and storage activity accounts for 6.2% of the total workforce in the country. Accommodation and food services activities employ about 5% of the total workforce.
Sultanate of Oman:
- The Sultanate’s GDP is 29.3 billion Omani riyals.
- Wholesale and retail trade contributes 7% to the GDP, amounting to OMR 2,064.7 million.
- Restaurant and hotel activities contribute 1.1% to the GDP, amounting to OMR 308.6 million.
- Transport, storage and communications activities contribute an estimated 5.9% to the GDP, amounting to OMR 1,721.2 million.
Global Service Sector
The service sector is the largest contributor to global GDP, accounting for more than three-fifths of the GDP. The sector does not rely on the production of tangible goods such as automobiles and furniture, but rather provides intangible services such as banking, healthcare, transportation, hospitality, entertainment, and more. The value of the sector’s market was estimated at $10,814.49 billion in 2020, rising to $11,780.11 billion in 2021, with the market achieving a compound annual growth rate of 8.9%. After recovering from the effects of the Corona pandemic, global market experts expect the sector’s market to reach $15,683.84 billion by 2025, with the market achieving a compound annual growth rate of 7% in the coming years.
