Saudi non-oil economy grows for first time since pandemic began

Saudi Arabia’s non-oil activities have shown their first year-onyear growth since the coronavirus pandemic began devastating the global economy.

The non-oil economy — the key focus of the Vision 2030 diversification strategy — grew by 3.3 percent, according to new figures from the General Authority for

Statistics. It was the first positive outcome on an annualized basis since last March.

Overall gross domestic product was 3.3 percent down on the year, but the authority explained: “The year-on-year change was the result of the sharp decrease in the oil activities of minus-12 percent due to ongoing crude oil production cuts agreed by OPEC+ since May 2020.” Jason Tuvey, an analyst at consultants Capital Economics in London, said: “With oil output cuts now being eased and the vaccination program gathering pace, the economic recovery should get back on track over the rest of this year.

“This robust outturn came despite a worsening COVID-19 outbreak over the course of the quarter that prompted a tightening of virus restrictions in March. The vaccination rollout has ramped up and the most vulnerable should have received at least their first dose by the end of May, paving the way for an easing of restrictions.” Tuvey said. With the oil cuts due to end next year and crude prices rising, some experts think there is scope for further loosening of tight fiscal measures — such as the 15 percent value-added tax (VAT) rate — introduced during the pandemic.