Saudi Arabia’s economy shrank 3.9 per cent year on year in the fourth quarter but rose 2.5% from the previous three months, according to data on Tuesday that showed an upturn from the depths of the coronavirus pandemic towards the end of 2020.
The oil sector contracted by 8.5 per cent and the non-oil sector by 0.8 per cent from the same period of 2019, Saudi Arabia’s General Authority for Statistics said.
But the same sectors rose a seasonally adjusted 2.6 per cent and 2.4 per cent, respectively, from the third quarter, with international trade picking up sharply.
“The data points to a further broad-based recovery in non-oil activity from the height of the crisis, with a fall in Covid cases at end-2020 and as the economy opened up,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
The kingdom’s investment programme would be a key driver of future growth, she said, referring to huge infrastructure projects backed by its sovereign wealth fund, the Public Investment Fund.
Saudi Arabia, the world’s biggest oil exporter, and other members of the Organisation of the Petroleum Exporting Countries and its allies, have been curbing output to support oil prices since January 2017.
Some economists scaled back their headline growth forecasts for Saudi Arabia, the largest Arab economy, after Opec and its allies agreed to extend most oil cuts into April.
On a quarterly basis, imports of goods & services grew by 21.2 per cent after shrinking 7.9 per cent in the third quarter, while exports rose 3.7 per cent after contracting 6.5 per cent. — Reuters
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