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Saudi Arabia’s economy contracts by 3.3% in Q1

Saudi Arabia’s economy_IFM_Image
The overall GDP was further affected by a 12% decline in ongoing crude oil production cuts

Saudi Arabia’s economy shrank by 3.3 percent in the first quarter of 2021 because of oil output cuts, but the non-oil economy grew by an additional 3.3 percent while recovering from the pandemic. According to the General Authority for Statistics in Saudi Arabia, the non-oil sector grew for the first time since the first quarter of 2020, and government services also recorded a growth of 0.3 percent in the first quarter.

Known as the largest economy in the Arab World, Saudi Arabia is now expected to grow 2.1 percent in 2021 after showing a decline of 4.1 percent in 2020, where the market was severely affected by the coronavirus pandemic and lower oil prices, reported IMF.

The non-oil sector of Saudi Arabia showed an upwards steep for the first time since the first quarter of 2020, while the government sector also showed a growth of 0.3 percent in the first quarter.

The latest data also mentioned that Saudi Arabia is trying to boost its non-oil sector through a multi-trillion dollar deal that will require state companies to reduce the dividends that they pay the government in order to boost capital spending, Crown Prince Mohammed Bin Salman said in a statement.

Prince Mohammed, who is the architect of Saudi Vision aims to correct the oil disparity by 2025 with the help of the Public Investment Fund that will invest a whopping amount of SR150 billion into the local economy.

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