ECONOMY

Saudi Arabia’s non-oil economy expands on private sector growth

Saudi Arabia’s non-oil GDP grew by 2.9 percent year-on-year in the second quarter of 2019. (File photo: AP)

Saudi Arabia’s non-oil gross domestic product (GDP) grew by 2.9 percent year-on-year in the second quarter of 2019, up from 2.1 percent in the first quarter, largely in line with earlier estimates made by the International Monetary Fund (IMF).

“This was driven by stronger activity in the private sector, which we suspect is largely a reflection of previous fiscal stimulus efforts,” Jason Tuvey, Senior Emerging Markets Economist at London-based consultancy Capital Economics, said in a research note.

The private sector expanded 3.4 percent during the quarter, up from 1.93 percent in Q2 2018. Meanwhile, public sector growth slowed to 1.76 percent from 3.8 percent in the same quarter last year, according to statistics released by the Saudi Arabian General Authority for Statistics.

The IMF had also set its outlook for the Saudi Arabian non-oil sector at 2.9 percent for 2019 on the back of increased government spending and overall confidence.

Real GDP growth, however, is expected to slow to 1.9 percent with real oil growth slowing to 0.7 percent as oil production cut policies are implemented, according to the IMF. This estimate is in line with other recent reports.

Since 2015, the Kingdom has been working to implement its Vision 2030 reform plan to reduce its dependence on oil revenues and stimulate economic growth.
 

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Last Update: Tuesday, 1 October 2019 KSA 17:44 - GMT 14:44
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