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- Rising world demand for oil in 2021 helped fuel this increase
CAIRO: The Saudi economy grew in the third quarter of 2021 by the fastest pace since 2012 as the country's oil output grew over the last year.
The Kingdom's real GDP grew at an annual rate of 6.8 percent in the third quarter compared to negative growth of 4.5 percent a year ago, according to flash estimates by the General Authority for Statistics (GASTAT).
Oil activities went up by an annual rate of 9 percent in Q3 2021, following a drop by 7 percent in the previous quarter. This was the first increase in annual rate of growth in the oil activities since the first quarter of 2019.
Rising world demand for oil in 2021 helped fuel this increase, GASTAT explained.
Meanwhile, growth in non-oil activities eased to 6.2 percent in this year’s third quarter, following a higher 11.1 percent expansion in the previous quarter, according to today's release.
GASTAT has made an upward revision of its previous estimate for non-oil growth in the second quarter of 8.4 percent posted 13 September.
In addition, output of government activities went up by 2.7 percent compared to 0.4 percent in the second quarter.
This compares with GASTAT previous estimate of 2.3 percent.
On a quarterly seasonally adjusted basis, the Saudi economy grew by 5.8 percent in Q3, accelerating significantly from the previous quarter’s 1.1 percent.
This was fuelled, again, by a rapidly increasing oil activities, which expanded by a quarterly rate of 12.9 percent.
Capital Economics said that further strengthening of Saudi output is expected for the fourth quarter and next year.
The main drivers of the projected rise in output are raised production quotas by OPEC+, a further relaxing of Covid restrictions, and a possible loosening in Saudi fiscal policy.
The London-based firm also outlined its growth projections for next year.
It expects the Saudi economy to expand by 7.3 percent in 2022, which is above the consensus prediction of 5 percent.