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Saudi Arabia’s GDP Dropped in Oil Sector

The gross domestic product of Saudi Arabia fell 3% in the first quarter, slightly less than official estimates. They are compared with a 1% contraction last year, as a sharp fall in the Oil Sector pulled back the economy, data showed. The economy has been hit hard by the twin shock of last year’s historic oil price crash and the COVID-19 pandemic.

The non-Oil Sector grew 2.9%, from 1.6% growth a year earlier, while the declined by 11.7% which was a much sharper fall than the 4.6% contraction a year earlier, the General Authority for Statistics.In flash estimates in May the authority said the economy decreased 3.3% in the first quarter. The non-Oil Sector grew for the first time since the first quarter of 2020.

The non-oil and private sectors are at the centre of Vision 2030, de facto ruler Crown Prince Mohammed bin Salman’s transformation plan to wean the Saudi economy off oil. The GDP, an inflation-adjusted measure, shrank 4.1% last year. The International Monetary Fund expects the Saudi economy to grow 2.1% this year. Saudi Arabia’s private sector expanded by 4.4% in the first quarter and the government sector declined slightly, by 0.4%, the official data showed.

Every quarter, real GDP declined by 0.5%, mainly due to an 8.7% drop in the Oil Sector, while the non-Oil Sector expanded by 4.9% compared to the fourth quarter, driven by a 6.3% private sector expansion as well as 1.7% growth in the government sector.Compared to a year earlier, the first quarter saw the highest economic growth in petroleum refining activities, which expanded 21.2%, followed by manufacturing, which grew 8.9%.

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