The National Accounts publication of the first quarter of this year showed a significant recovery for the annual real GDP growth after it increased by 1.2% 2018 Q1 year-on-year.
The positive recovery took place after four consecutive quarters of economic slowdown, which indicates the resilience of the Saudi economy and its ability to recover from the reduction in oil prices and the structural reforms.
The recovery came as a result of the accelerated growth both in the oil and non-oil sectors. In which the oil sector grow by 0.6% in the first quarter of 2018 compared to the drop by 4.3% in the same quarter in 2017. On the other hand, the non-oil sector grow by 1.6% in the first quarter 2018 compared to 1.3 (Y-O-Y)
This is an indicator to the recovery that the Saudi economy is experiencing after the slowdown in 2017.
The main drivers behind the recovery were by the non-oil manufacturing and mining sectors by 4.6% and 6.3% respectively.
And according to the vision 2030 these sectors are expected to lead the growth in the kingdom.
In addition, the government services and financial services sectors played a role in the non-oil sector growth. In which, the government services and financial services sectors grow by 3.4% compared to 3.2% in 2017 and 2.1% compared to 0.8% in 2017 respectively.
The growth in both sectors is expected to rise after listing the Saudi stock market in the MSCI and implementing the financial sector program initiatives.
At the same time the construction sector kept shrinking, however in a slower paced, by 2.4% compared to 3.5% in the fourth quarter in 2017.
This is a result of the completion of so many big projects.
The retail sector and hospitality decreased by 0.5% in the first quarter compared to a growth by 1.4% in the fourth quarter in 2017.
The report suggest that this is an expected behavior; in which it came as a results of more rationalized spending for the households as a result for implementing the VAT.