Saudi Arabia’s economy grows 1.66 percent in Q1

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Saudi Arabia’s economy grew 1.66 percent in the first quarter, in line with expectations of a modest pick up as oil production cuts weigh on the world’s top crude exporter.

The Saudi oil sector grew 1 percent in the first quarter, government data showed on Sunday.

The Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies agreed in December to slash oil production by more than the market had expected.

On Sunday, Saudi Energy Minister Khalid al-Falih said the cuts would most likely be extended by nine months.

This is expected to weigh on oil sector growth this year, while non-oil sector growth is likely to pick up slightly, on the back of a boost in government spending.

Non-oil sector growth in the first quarter was 2.13 percent, largely in line with the same period last year, but up from a 1.8 percent growth in last year’s fourth quarter.

Non-oil activity picked up particularly in the private sector, which saw a growth of 2.3 percent.

The IMF said last month real non-oil growth is expected to strengthen to 2.9 percent in 2019, boosting overall economic growth to 1.9 percent, higher than its earlier projection of 1.8 percent.

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