Saudi Arabia: Low oil prices hit growth in Q3
December 27, 2015
GDP expanded 3.6% in Q3 over the same quarter last year, which represented a deceleration over the 3.8% increase tallied in Q2. The print overshot the 3.2% increase that FocusEconomics panelists had expected. The deceleration observed in Q3 mainly reflected a slowdown in the oil-related sector (Q2: +5.1% year-on-year; Q3: +3.8% yoy), while non-oil industries recorded a mild improvement (Q2: +3.1% yoy; Q3: +3.3% yoy).
Growth in the agriculture sector slowed to 0.8% in Q3 (Q2: +1.0% yoy), while dynamics in the manufacturing sector accelerated to a 7.5% expansion (Q2: +4.3% yoy) due to strong petroleum refining. Activity in mining and quarrying, which include the all-important crude and oil sectors, rose 2.4% in Q3, marking a deceleration over the 4.8% increase in Q2. The slowdown reflected the sharp fall in oil prices seen in Q3 as well as less robust crude supply. In the services sector, growth in financial services and construction picked up in Q3, while dynamics in domestic trade decelerated.
In a separate publication associated to the 2015 budget report, the Central Department of Statistics & Information stated that economic growth decelerated slightly from 3.64% in 2014 to 3.35% in 2015 due to weaker activity in the non-oil sector.