Saudi Arabia: GDP accelerates to a fresh over-decade high in Q2
July 31, 2022
A flash estimate showed that the economy grew 11.8% on an annual basis in Q2—the fastest pace since 2011—thereby confirming the economy continued to grow at breakneck speed after expanding 9.9% in Q1.
The improved performance was due to a stronger expansion in the oil sector, which grew 23.1% in Q2 compared to 20.3% in Q1. Growth in the non-oil private sector edged up to 5.4% in Q2 from 4.5% in Q1, while non-oil government activity growth slowed to 2.2% in Q2 (Q1: 2.4%).
Q2’s acceleration was in part due to a base effect—seasonally adjusted quarter-on-quarter growth slowed to 1.8% in Q2 from 2.6% in Q1. The non-oil sector dragged on sequential growth. Nonetheless, the oil sector sped up in quarter-on-quarter terms due to rising oil production. Looking ahead, the oil sector is set to continue driving momentum. Regarding overall GDP, sequential growth is likely to remain robust in Q3, though year-on-year growth will be dented by a tougher base effect.