Saudi Arabia’s economy posted its first year-on-year growth since the start of the COVID-19 pandemic as non-oil growth surged.
The Kingdom’s real GDP rose 1.5 percent in the second quarter of 2021 from a year earlier, according to data from the General Authority for Statistics. The non-oil economy grew by 10.1 percent, oil activity contracted 7 percent and government output climbed by 0.7 percent, the report showed on Monday.
The data represents a rebound after five consecutive quarters of year-on-year declines, including a 7 percent drop in the second quarter of 2020 when lockdowns to slow the spread of the pandemic took effect globally.
GDP expanded 1.1 percent from the previous quarter after shrinking 0.5 percent in the first three months of the year. However, Saudi Arabia had posted quarter-on-quarter growth in the third and fourth quarters of 2020 following a 5.5 percent contraction in Q2, the data show.
The quarter-on-quarter GDP growth “was driven by the unwinding of the voluntary oil output cuts and the easing of virus-related restrictions supported domestic activity,” said James Swanston, Middle East and Africa economist at Capital Economics.
“With the OPEC+ impasse now resolved oil production will be raised further and remaining virus restrictions are being relaxed, the economic recovery looks set gather pace over the second half of the year,” he said.
Capital Economics predicts full-year GDP growth of 4.8 percent in Saudi Arabia this year and 6.3 percent in 2022, higher than the consensus forecast of 2.4 percent and 4.6 percent, respectively.
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