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Home - September 2021

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ECONOMIC TRENDS

 

Both oil and non-oil exports have shown impressive performance after suffering a big setback last year due to the pandemic.

OIL AND GAS

 

By next year, oil consumption worldwide will surpass pre-pandemic levels as COVID-19 management improves and vaccination rates increase.

RENEWABLE ENERGY

  

The creation of a voluntary exchange platform for carbon credits will support regional companies’ efforts to meet their sustainability goals.

COVID-19

 

The kingdom’s strong vaccine policy has led to a drop in recent infection rate, allowing the economic activities to power ahead.

SME

 

The Technical Growth Financing programme will make funding more accessible for small technology companies aiming for growth.

MANUFACTURING

 

The country’s investment scheme has piqued the interest of investors looking to realise the various opportunities in the sector.

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 IN THIS EDITION

Saudi Arabia’s real gross domestic product (GDP) grew 1.8% in the second quarter, confirming a strong rebound in economic activity, with the non-oil sector posting impressive gains.

The non-oil sector expanded 8.4% in the second quarter, according to the General Authority for Statistics, while the private sector grew 11.1% and the government sector inched up 2.3% during the period.

The oil sector declined 6.9%, but it was still its best performance in at least five quarters, with prospects improving for the industry as oil prices continue to remain at elevated levels.

The growth in the non-oil sector was broad based with community, social and personal services expanding 17.1%, the pandemic-hit wholesale and retail trade, restaurants and hotels surged 16.9%, while manufacturing ex-petroleum refining climbed 15.3%. Transportation (up 11.1%) and petroleum refining (up 10.1%) were also among sectors that saw double-digit gains during the quarter compared to the same period last year.

Indeed, the oil sector is coming back strongly, as crude petroleum and natural gas grew at the highest rate of 2.6%, quarter on quarter, and compared to -8.7% in the first quarter of 2021.

Crucially, private final consumption expenditure grew at a rate of 21.9% in the second quarter on a year-on-year basis, and compared to 1.3% in the first quarter.

Gross fixed capital formation – a key measure of changes in investment – surged 18.3% in the second quarter compared to 7.0% in Q1. Government final consumption expenditure grew by 3.2% compared to -0.8% in Q1.

The fast-improving data will gain further traction as the government announces new measures such as the SAR 4 billion technology programmes featuring some of the world’s biggest tech companies including Google, Amazon and Oracle, and government support for local businesses. In September, the government issued a list of 28 items that public sector companies should buy only from local businesses.

Such support will further fuel business sentiment, which is already improving at an impressive rate.
DISCLAIMER