DUBAI- Saudi Arabia’s gross domestic product fell 3 percent in the first quarter, slightly less than official estimates and compared with a 1 percent contraction last year, as a sharp fall in the oil sector pulled back the economy, data showed.
The kingdom’s 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 percent, from 1.6 percent growth a year earlier, while the oil sector declined by 11.7 percent which was a much sharper fall than the 4.6 percent contraction a year earlier, the General Authority for Statistics said in a statement on Monday.
In flash estimates in May the authority said the economy shrank 3.3 percent in the first quarter and the non-oil sector grew for the first since the first quarter of 2020.
The non-oil and private sectors are at the center of Vision 2030, de facto ruler Crown Prince Mohammed bin Salman’s transformation plan to wean the Saudi economy off oil.
Real GDP, an inflation-adjusted measure, shrank 4.1 percent last year. The International Monetary Fund expects the Saudi economy to grow 2.1 percent this year.
Saudi Arabia’s private sector expanded by 4.4 percent in the first quarter and the government sector declined slightly, by 0.4 percent, the official data showed.
On a quarterly basis, real GDP declined by 0.5 percent, mainly due to an 8.7 percent drop in the oil sector, while the non-oil sector expanded by 4.9 percent compared to the fourth quarter, driven by a 6.3 percent private sector expansion as well as 1.7 percent growth in the government sector.
