Saudi Arabia: GDP growth slows slightly in Q4
A flash estimate showed that the economy grew 6.8% on an annual basis in the fourth quarter, after expanding 7.0% in the third quarter.
The slight slowdown was mainly due to weaker expansions in non-oil sector output. Non-oil private sector economic growth eased to 5.0% in Q4 from 6.2% in Q3, while non-oil government activity growth slowed to 2.4% in Q4, from 2.7% in Q3. Nevertheless, the oil sector gained momentum, growing 10.8% in Q4, which was stronger than Q3s 9.3% rise.
Looking ahead, the non-oil private sector should continue to benefit from looser Covid-19 containment measures and the resumption of international travel, as the global vaccination campaign gains further steam and the spread of the Omicron variant slows. Turning to the oil sector, the ongoing easing of OPEC+ production curtailments should continue to support the energy economy and oil output.
Commenting on the GDP outlook, Asad Khan, chief economist and head of research at Jadwa Investment, noted:
“Looking ahead, we see overall GDP in 2022 rising by 7.7%, as oil sector GDP sees sizable rises of 15.5%. Despite a moderation in year-on-year non-oil growth (largely as a result of a higher base in 2021), the economy will be driven forward by the continued implementation of the Vision 2030, which will be guided by a set of five-year commitments (until 2025) under various Vision Realization Programs (VRPs). As such, we expect the non-oil sector to register a rise of 3.4%, year-on-year.”