Saudi economy grows fastest in decade on higher oil production | Business and Economics News
Higher oil production from Saudi Arabia and other OPEC+ states was expected to offset Russian production losses.
Saudi Arabia’s gross domestic product rose 9.9% in the first quarter, the fastest in a decade and more than a flash estimate of 9.6% last month, official data showed.
This is the fastest expansion since the third quarter of 2011, with increased oil production a key driver, said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
“This growth is due to the strong increase in oil activities of 20.3%,” said the General Statistics Authority.
GDP growth was 2.6% higher than in the fourth quarter on a seasonally adjusted basis, while oil activity rose 2.9% on a quarterly basis, data showed on Tuesday.
Crude oil and natural gas activities were the main contributor to GDP at 32.4%, the statistics authority said.
Non-oil activity increased by 3.7%, or 0.9% compared to the previous quarter. Government activity rose 2.4% year-on-year, but fell 0.9% from the fourth quarter.
“All economic activities recorded positive annual growth rates in the first quarter of 2022,” the General Statistics Authority said.
Wholesale and retail trade, catering and hospitality activities rose 6.3 percent from a year earlier, while exports rose 22.1 percent, the data showed.
GDP per capita of 26,961 riyals ($7,187) in the first quarter of 2022 increased by 33.8% compared to the corresponding quarter of 2021.
“Underlying data still points to a healthy pace of expansion in the non-oil sector,” Malik said, adding that “Saudi Arabia is in a very strong position given limited global oil capacity and prices. high oil”.
Saudi Arabia and other OPEC+ states have agreed to advance oil production increases to compensate for Russian production losses following Western sanctions over Moscow’s invasion of Ukraine, what it calls a “special military operation”.
In April, the International Monetary Fund raised the kingdom’s economic growth outlook to 7.6% in 2022, citing higher oil production and prices, from 3.2% in 2021.